EUR/GBP - EUR/GBP is Ready to Retest 100-daily SMA - 01/17/2017 (GMT)

The euro traded higher for the last four weeks and surged more than 5% against the sterling. However, the EUR/GBP pair created the second negative day in a row following the strong bounce off the 0.8850 resistance barrier. The pair would be affected by both significant events, PM Theresa May’s speech today as well as, ECB interest rate decision on Thursday.

From the technical structure, the next level to the downside to watching is the 100-daily SMA which seems to be a strong support handle for the bulls. Then, our expectation is a further upside potential move until the 0.8850 obstacle or moreover until the 0.9050 price level. The RSI indicator is falling from the overbought area and is moving towards the 70 level endorsing the weaknes of the bullish momentum. On the stochastic oscillator, a bearish crossover within its moving averages has been observed.