EUR/GBP Price Forecast: In a corrective pullback, supported by 0.8600

• Hopes of a trade deal between the US and the Eurozone are keeping the Euro buoyed on Tuesday.
• The technical picture shows a mixed to negative trend from last week's highs.
• Resistances at 0.8640 and 0.8665 are likely to hold upside attempts today.

The Eurozone has skipped the first round of tariff letters by the US Administration, and that is good news for the Euro. The trade talks with the US advance, and apparently on good terms, which feeds hopes that the EU might be able to avoid even the 10% baseline tariff.

This news has contributed to lifting the Euro on Tuesday and reversing Monday's decline as mixed trade data from Germany and France has failed to improve confidence in the Common Currency. From a broader perspective, the 4-hour chart highlights a mixed to bearish corrective trend from last week's high, at 0.8670.

Technical Analysis: EUR/GBP is giving signs of topping

The technical picture in the four-hour chart is mixed. The RSI is back above 50, but price action is showing a descending trend from the July 2 highs. Elliott Wave analysis suggests that the pair has completed a 5-Wave bullish cycle and is now in an A-B-C correction.

Immediate support is at 0.8600 (July 7 low) ahead of the 0.8550 - 0.8560, where the July 1 low meets the 38.2% Fibonacci retracement of the June-July rally, and a significant technical floor for a bearish correction.

On the upside, July 4 and 7 highs at the 0.8640 area are closing the path towards the  July 2 high, at 0.8665. A confirmation above here cancels this view and shifts the focus to the year-to-date high, at 0.8740.