EUR/GBP corrects to 0.8265 on profit-taking

Recovery momentum in the British Pound has now gained traction, with the EUR/GBP cross now sliding further below 0.8300 handle to currently trade near session low level.

An unexpected outcome from the historic EU referendum in UK led to a sharp up-surge of over 750-pips for the cross in just two trading session. The British Pound now seems to have stalled its relentless fall, assisting the EUR/GBP cross to trim some of its big gains. 

A fresh bout of short-covering might have been the key factor assisting the British Pound to relatively outperform its European counterpart. However, the uncertainty surrounding the economic implication of the Brexit might restrict any sharp near-term recovery for the British Pound and thus restrict sharp slide for the EUR/GBP cross. 

Technical outlook

Yann Quelenn, Market Analyst at Swissquote Bank SA, notes, "EUR/GBP is now stalling below 0.84. Hourly resistance can be found at 0.8379 (27/06/2016 high) while hourly support is located far away at 0.7681 (24/06/2016 low). Expected to further consolidate."

"In the long-term, the pair is currently recovering from recent lows in 2015. The technical structure suggests a growing upside momentum. The pair is now trading far away from its 200 DMA. Strong resistance can be found at 0.8815 (25/02/2013 high)."