EUR/GBP off-highs 0.8760, tombstone doji in process?

The British Pound made some decent attempts during the European session to erase yesterday's losses after PM May's televised statements related to Brexit. On that recovery, the EUR/GBP cross trades 60 pips off highs as trading conditions seem to support a pause in the selling pressure. 

Fawad Razaqzada, technical analyst at Forex.com noted, "The EUR/GBP could stage a much deeper retracement before it potentially falters, but it has respected the 0.8760/5 resistance level today which is interesting to note because the GBP/USD has in the meantime arrived at its own support area around 1.2100, as we highlighted yesterday. In fact, the EUR/GBP is currently displaying a reversal-looking candlestick formation on its daily chart off of this level: an inverted hammer/long-legged doji. This pattern will be confirmed if remains around the current levels by the close of play. The cross would look more bearish if it finds itself back below the broken resistances at 0.8705 or ideally 0.8670 now. If that happens then this could lead to further follow-up technical selling pressure in the days and weeks to come, initially towards 0.8500 but potentially beyond over time."

EUR/GBP Technical Levels

Slobodan Drvenica, Information and Analyst Manager at Windsor Brokers offered a detailed technical view on the cross, "The pair eases from today's fresh recovery high at 0.8761 (the highest since 11 Nov), so far unable to clearly break above important barrier at 0.8749 (Fibo 38.2% of larger 0.9472/0.8302 descend) that was cracked on today's rally. Near-term action remains deep in thick daily cloud, as yesterday's long bullish candle generated strong bullish signal for further upside. Plethora of solid supports lies below, starting with session low at 0.8689, followed by 100SMA at 0.8627 and ascending daily Tenkan-sen at 0.8605 is expected to contain dips, before fresh attempts higher. Firm break above Fibo barrier at 0.8749 would expose next strong resistance at 0.8887 (daily cloud top). Alternative scenario requires return below daily cloud base at 0.8561 to weaken the structure and signal lower top."

On the daily chart, there is evidence to support a tombstone doji formation. If prices continue the current trajectory, further pound gains cannot be denied. On the long-term view, the trend is bullish. However, current price action seems non-directional. To the downside, the most logical support on the table is the 0.8340 (short-term 61.8% Fib), if prices close and open below such level, then 0.8070 (short-term 50.0% Fib) handle becomes a reality. Finally, to the upside, 0.9206 clocks as the only worthy target for euro bulls. 

EUR/GBP could drop as GBP attempts to regain poise