EUR/GBP upside is faltering after failing to break the 200-day moving average
The pair ran into resistance from the 200-day MA (blue line) and has since backed away from a test of that level and falling back below 0.8700 in overnight trading.
European officials talking up post-Brexit talks helped to give the pound a bit of a lift as well but the pullback also suggests that buyers are starting to feel exhausted as we see price even take out a key near-term level:
The break below the 100-hour MA (red line) sees the near-term bias turn more neutral and that puts price action trapped within the battleground of the 100-hour MA @ 0.8671 and the 200-hour MA (blue line) @ 0.8546.
However, there is also minor support around 0.8600 and I reckon a break below that will see sellers build more conviction to drive price lower from hereon.
The pound may not have much going for it with post-Brexit trade talks likely to still end up going nowhere despite some initial optimism, and the BOE also possibly having to cut rates by as much as 50 bps this month.
However, the technical levels aren't really hinting at much weakness for now and perhaps a slight pullback is in order after the move up from 0.8300 since the middle of last month.
