EUR/GBP can persist towards the 50-DMA at 0.8465 and the graphical levels of 0.8480/0.8500, Societe Generale FX strategists note.

Defence of recent pivot low at 0.8400 is crucial

EUR/GBP has rebounded after approaching the lower limit of a multi-month channel near 0.8380/0.8370. It has formed a bullish engulfing candlestick yesterday encompassing price action of previous seven sessions denoting exhaustion in down move.

The bounce could persist towards the 50-DMA at 0.8465 and the graphical levels of 0.8480/0.8500 representing lows of February; this could be an important hurdle. Defence of recent pivot low at 0.8400 is crucial for continuation in up move.