EUR/GBP Technical: Medium-term bullish basing as BoE looms

• Three key technical developments have suggested that the EUR/GBP cross pair has formed a potential medium-term bullish basing configuration since 23 August 2023
• Watch the key short-term support at 0.8680.
• Immediate resistances stand at 0.8750 and 0.8820.

The price actions of the EUR/GBP cross pair have started to trace out a medium-term bullish basing configuration since 23 August 2023 as we await the latest Bank of England (BoE) monetary policy decision later today.

Clearance above 200-day moving average

Fig 1:  EUR/GBP medium-term trend as of 2 Nov 2023 (Source: TradingView, click to enlarge chart)

There are three key positive technical developments that have taken form. Firstly, the bullish basing formation has taken shape after a recent retest (23 August 2023) on the major ascending trendline from the 7 March 2022 low of 0.8203.

Secondly, recent price actions have surpassed the key 200-day moving average with a retest and rebound from it during yesterday’s US session (1 November) ex-post FOMC.

Thirdly, the 20 and 50-day moving averages have started to slope upwards with price actions above the 50-day moving average that indicate a potential medium-term uptrend phase is in motion.

Oscillation within a minor ascending channel

Fig 2:  EUR/GBP minor short-term trend as of 2 Nov 2023 (Source: TradingView, click to enlarge chart)

In the short-term as seen in the 1-hour chart, the EUR/GBP has evolved into an impulsive up move sequence within a minor ascending channel in place since the 6 September 2023 low.

Watch the 0.8680 key short-term pivotal support (lower boundary of the ascending channel & 20-day moving average) for a potential push-up to retest the 31 October minor swing high area of 0.8750 before the intermediate resistance at 0.8820 (upper boundary of the ascending channel, 2/3May 2023 swing high & Fibonacci extension).

However, a break below 0.8680 negates the bullish tone for a pull-back toward the next intermediate support at 0.8640 (50-day moving average).

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