FxWirePro: EUR/GBP extends break above 21-EMA, poised for further upside

EUR/GBP chart - Trading View 

Technical Analysis:

EUR/GBP was trading 0.21% higher on the day at 0.8628 at around 09:00 GMT, scope for further upside.

Price action has ignored an inverted hammer on the previous session and is extending gains above 21-EMA.

Technical indicators have turned bullish on the intraday charts with scope for further upside. 

The pair trades above 200H MA, 5-DMA has turned and Stochs and RSI show bullish momentum and volatility is rising.

Further, bullish divergence on Stochs and RSI on the daily charts adds to the upside bias. 

Data Released:

The preliminary manufacturing activity report from IHS/Markit research showed German manufacturing sector outperformed in March. The index hit highest since April 1996.

German Preliminary Manufacturing PMI rises to 66.6 in March vs. 60.8 expected. Services PMI in Germany expands to 50.8 in Mar vs. 46.2 expected.

The IHS Markit Flash Germany Composite Output Index jumped to 37-month highs of 56.8 in March vs. 51.6 expected and February’s 51.1.

On the other side, the pound is under pressure as UK CPI missed estimates to print at 0.4% (forecast 0.8% and prior 0.7%).

Support and Resistance Levels:

Support levels - 0.8613 (21-EMA), 0.8593 (5-DMA), 0.8584 (200H MA)

Resistance levels - 0.8676 (Upper BB), 0.8697 (23.6% Fib), 0.8714 (55-EMA)

Summary: EUR/GBP is extending upside in the week after a Doji on the previous week's candle. Break above 21-EMA has reinforced upside for the pair. Bulls in the pair eye 23.6% Fib at 0.8697. Failure to close above 21-EMA negates upside bias.