Sterling is trading distinctly lower in mid-week trade despite rising efforts by the UK Prime Minister Theresa May to gratify the opposition Labour party with benefits like EU customs deal, the cross-party negotiations couldn’t extend a Brexit proposal through their Tuesday’s gathering.
The UK PM May has been working to bypass the current month’s EU elections by offering a Brexit plan to the provincial lawmakers but has disappointed so far. Let’s look at the technical outlook…
EUR/GBP – Technical Analysis
The cross pair has made a nice bullish reversal during the European session. The EUR/GBP traded sideways near 0.8570 ahead of the UK markets open on Wednesday. Whereas, the gradual recovery of 14 periods relative strength index (RSI) simulates the base currencies strength. Yup, I’m signalling to Euro as the pair has started bouncing off above a double bottom support area of 0.8450.
On the weekly timeframe, EUR/GBP has formed a double bottom, and there’s also a long term channel which is supporting the pair around 0.8450. Therefore, if prices surge beyond 0.8610, 0.8650 and 0.8680 could instantly appear on the Bulls’ radar. While, 0.8555, 0.8530 and 0.8510 can entertain short-term sellers ahead of questioning them with current month lows near 0.8490.
Support and Resistance
Key Trading Level: 0.8529
EUR/GBP – Trade Idea
Consider staying bullish above 0.8550 and bearish below 0.8650 as the market is most likely to consolidate in this range. All the best!