- EUR/GBP consolidates gains in the early European session.
- Pair awaits confirmation to trade in either direction.
- Neutral Momentum oscillator cautions on directional bet.
The EUR/GBP cross gains traction in the early European session. The cross trades in a very narrow trading band following the previous day’s trend before testing an intraday high at 0.8611.
At the time of writing, the EUR/GBP cross is trading at 0.8609, up 0.24% on the day.
EUR/GBP daily chart
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On the daily chart, the EUR/GBP cross has been looking for a clear direction following the formation of the Doji candlestick for the third day in a row. The cross confides in a broader trading range capping the high near 0.8720 and lows in the vicinity of 0.8580, which constitute the formation of rectangle formation.
On moving higher, if price makes a sustained move above the 0.8600 mark, then it could trace back to the 50-hour Simple Moving Average (SMA) placed at 0.8615 followed by the April 20 high at 0.8643.
The next area of resistance would be the April 22 high at 0.8702.
The receding Moving Average Convergence Divergence (MACD) indicator suggests any downtick could bring sellers back in action. The first support level could be located at the bottom of the rectangle formation at 0.8550.
Market participants would next be following the 0.8530 and 0.8500 horizontal support levels.