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EUR/GBP Price Analysis: Breakout of the Flag suggests fresh upside potential
After surpassing the 0.8870 resistance, EUR/GBP will display a Flag breakthrough. A rising 200-EMA indicates a bullish long-term trend. A RSI (14) oscillation between 40.00 and 60.00 indicates the absence of a probable trigger.
During the Asian session, the EUR/GBP pair is demonstrating erratic behavior below the important barrier of 0.8840. The cross trades aimlessly in the lack of a possible catalyst. In the meantime, the European Central Bank (ECB) is anticipated to halt its policy tightening, as ECB governing council member Mario Centeno stated that Eurozone inflation may encounter tough resistance in January and February, but will begin to decline in March.
On a four-hour time frame, EUR/GBP is developing a Bullish Flag chart pattern, which signifies a consolidation followed by a breakout. Typically, the consolidation phase of a chart pattern serves as an inventory adjustment during which participants initiate long positions, preferring to enter an auction only after a bullish bias has been established.
The 50-period Exponential Moving Average (EMA) has turned sideways near 0.8820, indicating further consolidation. While the 200-day exponential moving average (EMA) at 0.8755 is still rising, this indicates a bullish long-term trend.
In the meantime, the Relative Strength Index (RSI) (14) oscillates between 40.00 and 60.00. It indicates the absence of a probable conviction move trigger.
A breach over the high of January 6 at 0.8871 will propel the asset towards the round-number barrier at 0.8900, followed by the high of September 29 at 0.8979.
In contrast, a fall below Monday's low at 0.8769 will drive the asset toward the bottom on December 21 at 0.8716. A decline in the latter will drive the asset to its low on December 19 at 0.8691.
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