• EUR/GBP falls as UK bond yields exceed German bond yields and the pound strengthens.
  • From a technical perspective, the pair is showing a neutral to bearish trend, with long-term daily EMAs above the exchange rates.
  • EUR/GBP needs to return to the 0.8600 level and break the daily low resistance of 0.8648 on 24 May to shift its bias.
  • The pair’s immediate support is at 0.8500, a break below which could lead to a decline towards 0.8535.

EUR/GBP fell during Friday’s session as UK bond yields outperformed those of German bonds, the strongest eurozone (EU), increasing appetite for the pound sterling (GBP). This, along with a technical chart for a transfer from a dark cloud, worsened EUR/GBP’s decline below 0.8600. At the time of writing, EUR/GBP is trading at 0.8585, down 0.33%.

EUR/GBP Price Analysis: Technical Outlook

Technically, EUR/GBP is still neutral to bearish, with long-term daily exponential moving averages (EMAs) above exchange rates; while EUR/GBP remains unable to break the May 24 daily low area, it has turned to resistance around 0.8648 and is seen as the last swing low that needs to be broken to reverse the pair’s bias.

However, EUR/GBP needs to regain 0.8600 on the way to this level. A breach of the latter will expose the May low of 0.8648, which, if decisively broken, could pave the way for a confluence of the 100- and 200-day EMA at 0.8693/95 before 0.8700 is breached.

On the contrary, and the path of least resistance, the first support for EUR/GBP would be at the 0.8500 level. A dip below will send the cross towards the June 23 daily low of 0.8535 before testing the June 19 swing low of 0.8518 before plunging to 0.85.

EUR/GBP Price Action – Daily Chart

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