- EUR/GBP increases bids to consolidate biggest weekly loss in three months.
- Convergence of 50-DMA, 100-DMA has placed a strong price floor.
- Recovery remains elusive below monthly horizontal resistance, bearish MACD signals keep sellers hopeful.
EUR/GBP licking its wounds near 0.8745 as it tries to recover from a monthly low during Friday. With this, the cross-currency pair consolidates its biggest weekly losses since the end of October ahead of a speech by the President of the European Central Bank (ECB) Christine. Lagarde and UK retail sales for December.
Technically, EUR/GBP is rebounding from the convergence of the 50-DMA and 100-DMA, around 0.8730 as of press time. Nevertheless, bearish MACD signals favor sellers of the pair.
This means that the latest rally could get the market’s attention if it manages to break through the one-month-old horizontal resistance, the previous support near 0.8770.
After that, a gradual run to the 10-week-old ascending resistance line, near 0.8910 as of press time, cannot be ruled out. However, the November 2022 high near 0.8830 could act as a temporary stop during the expected advance.
Meanwhile, a daily close below the 0.8730 confluence of support could quickly pull the EUR/GBP price towards the 0.8700 mark.
An ascending support line from early August 2022, but around 0.8630 at the latest, could challenge sellers of the pair later.
It should be noted that the EUR/GBP weakness around 0.8630 will not hesitate to challenge the previous monthly low near 0.8550.
EUR/GBP: Daily chart