Economists at Société Générale have delved into the technical dynamics of the EUR/GBP pair as it edges closer to the significant 0.8600 level.
Following a recent consolidation phase, EUR/GBP has defended its near-term support level at last week’s low of 0.8530, proximate to the August 2023 low of 0.8490. This consolidation has delineated a narrow base, with the pair breaching the upper threshold, indicating potential upward movement. Currently, it has encountered resistance near the 200-day moving average at 0.8610, coinciding with a trend line spanning multiple months.
The daily Moving Average Convergence Divergence (MACD) indicator has ventured into positive territory for the first time since January, signaling a resurgence in upward momentum.
Société Générale analysts posit that a sustained breach above 0.8610 could fuel further upside momentum. In such a scenario, the next target lies at 0.8665, representing the 61.8% retracement level from November 2023.
For traders monitoring near-term movements, the recent low of 0.8530 stands as a crucial support level, underpinning the current trajectory of the pair.
