EUR/GBP Technical Analysis: has eroded trendline from September 21 highs

• The EUR/GBP has found acceptance above the trendline sloping downwards from the Sept. 21 highs, meaning the pair has likely made a short-term low, close to the 200-day moving average (MA) at 0.8858.
• The cross may rise above the 50-day exponential moving average (MA) of 0.8918 if the UK services PMI disappoints expectations and more importantly, the ten-year Italy-Germany yield spread narrows sharply from the five-year high of 302 basis points hit yesterday.

Hourly Chart

Spot Rate: 0.8908

Daily High: 0.8918

Daily Low: 0.8892

Trend: Cautiously bullish

Resistance

R1: 0.8918 (50-day EMA)

R2: 0.8943 (38.2% Fib R of 0.9099/0.8848)

R3: 0.8996 (Sept. 21 high)

Support

S1: 0.8892 (100-day EMA)

S2: 0.8858 (Oct. 1 low)

S3: 0.8848 (Sept. 20 low)