EUR/GBP has a chance to resume its long-term bullish trend. On Wednesday, the pair sharply strengthened after the release of British inflation indicators, coming close to the key resistance level of 0.8682 (200 EMA, 144 EMA on the daily chart), breaking through the key long-term resistance level of 0.8655 (200 EMA, 144 EMA on the weekly chart) from the previous day.
A rise above the 0.8682 level may signify a breakout for EUR/GBP into the long-term bullish market zone, especially since the revised inflation data for the Eurozone turned out to be better than the initial estimate (+5.5% on a yearly basis in June, compared to the preliminary estimate of +5.4%).
Meanwhile, EUR/GBP continues to trade within the global bullish market zone, remaining above the key support levels of 0.8400 (144 EMA on the monthly chart) and 0.8210 (200 EMA on the monthly chart).
A breakout of today's local high at 0.8685, confirmed by a break of the key resistance level at 0.8682, will be a signal to resume long positions on EUR/GBP.
In an alternative scenario, EUR/GBP will return to the zone of long-term and medium-term bearish markets. A break below the key support level at 0.8655 will be the first signal to resume short positions with immediate targets at the support levels of 0.8620 (50 EMA on the daily chart), 0.8600, and 0.8593 (200 EMA on the 4-hour chart).
In case of further decline, EUR/GBP will head deeper into the downward channel on the weekly chart, towards its lower boundary and levels of 0.8500 and 0.8400.
Support levels: 0.8655, 0.8620, 0.8600, 0.8593, 0.8576, 0.8520, 0.8500, 0.8485, 0.8400
Resistance levels: 0.8672, 0.8682, 0.8700, 0.8800, 0.8825, 0.8870