pro-GBP in the short term, but further out the EUR is favoured

The outlook for the EUR-GBP exchange rate is tipped to weigh in sterling's favour in the short-term. An analysis of the currency pair's 30 minute chart by Trading Central reveals a preference for GBP gains.

Trading Central suggest short positions are maintained on the euro pound exchange rate (EUR-GBP) below 0.8645 with targets at 0.8575 and 0.8555 in extension.

However, a breach of 0.8645 opens the way for further gains towards 0.8675 and 0.871.

"The RSI is bearish and calls for further downside," say Trading Central.

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BUT - The longer term outlook favours the euro

While the short-term may favour the pound, it is worth noting that longer term the technicals favour the euro as we need to see some important resistance levels breached before throwing too much weight behind GBP.

This view is confirmed by Luc Luyet at MIG Bank who says:

"EUR/GBP declined yesterday, validating a daily  engulfing bearish formation. However, as long as the support at 0.8575 (10/07/2013 low) holds, a short-term move towards the resistance at 0.8794 is expected. Another support lies at 0.8470 (12/06/2013 low).

"From a longer-term perspective, the underlying trend is positive. Furthermore, the break of the resistance at 0.8637 (17/04/2013 high) validates a base formation. Monitor the next resistance area between 0.8794 (12/03/2013 high) and 0.8831 (27/10/2011 high)."