The EUR/GBP cross is trading higher for the second consecutive day, navigating a holiday-thinned session on Wednesday. The pair has climbed above the 0.8730 mark, bouncing from mid-term lows near 0.8700 to test weekly highs around the 0.8740 area at the time of writing.
Euro Outperforms in Cautious Trade Amid a moderately cautious market environment and a lack of significant fundamental drivers, the Euro is showing relative strength against the Pound. From a broader perspective, while the pair remains 0.7% below its mid-December peaks, it is on track to close the year with a respectable 5.5% appreciation.
Technical Analysis: Bulls Face Challenge at 0.8740 (Note: This header introduces the technical section)
On the 4-hour chart, EUR/GBP is trading around 0.8735, remaining virtually flat on a daily basis. Despite the lack of price movement, technical indicators suggest a shift in momentum. The Moving Average Convergence Divergence (MACD) has crossed into positive territory, signaling strengthening bullish momentum. Meanwhile, the Relative Strength Index (RSI) is printing at 57, rising above the 50 midline to indicate growing upside pressure.
Resistance Levels Immediate resistance aligns with last Monday’s high at 0.8739, a level that will likely test the strength of the current recovery. Beyond this, the next upside targets are the December 19 high at 0.8773, followed by the critical resistance zone near 0.8800 (defined by the highs of December 2, 16, and 17).
Support Levels On the downside, initial support is found at Tuesday’s low of 0.8706. A breach of this level exposes the mid-October support area between 0.8655 and 0.8665.
