The Euro has lost value against the British Pound, ending its streak of gains since early June. The exchange rate is around 0.8533 during American trading, which is a drop of 0.40% for the day. Despite this decline, the overall trend on the daily chart remains positive. Since late January, the Euro has been within a rising channel, with support near the 21-day EMA at about 0.8496.

Resistance and Support Levels

The pair faces resistance close to the 0.8550 level, which is near the 50% Fibonacci retracement from April’s high to May’s low. This resistance aligns with the midline of the channel, where traders might take profits and challenge recent upward momentum. Momentum indicators show a need for caution in the short term. The RSI has fallen from the overbought zone to 59.83, while the MACD indicates momentum is flattening. If the price closes above 0.8600, it could confirm a bullish outlook targeting 0.8740. If the drop continues, immediate support is at the 21-day EMA around 0.8496. Following that, stronger support lies at the 38.2% Fibonacci level at 0.8504 and the lower boundary of the channel near 0.8400.

Outlook and Strategy

This article discusses a short-term pullback in the EUR/GBP pair, reversing the Euro’s recent strength against the Pound. After a series of gains since early June, the rate dropped to about 0.8533 during New York trading, reflecting a 0.40% decline for the day, suggesting sellers are gaining some control — at least for now. Looking at the daily chart, the broader uptrend seems to remain intact. The Euro has been rising within a channel since late January. Although recent price action has slipped, the technical setup has not indicated a reversal just yet. Support, where buyers often return, is near the 21-day EMA, currently around 0.8496, which has historically been a point of renewed buying interest. Resistance is close to 0.8550, which matches the 50% Fibonacci retracement between April’s highs and May’s lows. This level, near the midpoint of the upward channel, often acts as a point where traders take profits instead of pushing for more upside. Momentum indicators show a potential shift. The RSI has moved down to 59.83 from the overbought territory, suggesting that short-term bullish pressure may be easing. Similarly, the MACD, a tool for assessing trend strength, is flattening, indicating that bullish momentum is fading for now. For decision-making, if the uptrend is to regain strength, focus should be on a daily close above 0.8600. If achieved, the target could return to 0.8740, where previous sellers were active. However, if the price falls below current support, especially under the 21-day EMA near 0.8496, the risk of a deeper correction increases. The next key level is around 0.8504, the 38.2% Fibonacci level, with the lower channel boundary near 0.8400 as the last strong support point for buying interest. For traders watching shorter-term instruments or planning for rollovers, these levels may serve as entry or exit points depending on their strategies. With momentum indicators softening while the broader bullish channel remains, being selective with directional trades is advisable. Not every dip is a buying opportunity, and upside momentum has not fully returned. Decision-making should favor confirmation over speculation. Create your live VT Markets account and start trading now.

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