EUR/GBP Price Forecast: Positive view prevails above 0.8670, traders await ECB rate decision

• EUR/GBP weakens to around 0.8670 in Wednesday's early European session, losing 0.20% on the day. 
• The positive view of the cross prevails above the key 100-day EMA with the bullish RSI indicator. 
• The immediate resistance level emerges at 0.8722; the first support level to watch is 0.8640.

The EUR/GBP cross attracts some sellers to near 0.8670 during the early European session on Wednesday. Renewed trade tension between the European Union (EU) and the United States (US) could exert some selling pressure on the Euro (EUR). The bloc appears to be considering whether to deploy its "Anti-Coercion Instrument" to try to deter trade disputes as the threat of a 30% tariff on EU imports looms large.

Traders brace for the European Central Bank (ECB) interest rate decision on Thursday for fresh impetus. The ECB is anticipated to hold rates steady at its July meeting. 

Technically, the constructive outlook of EUR/GBP remains in place as the cross is well-supported above the key 100-day Exponential Moving Average (EMA) on the daily chart. The upward momentum is reinforced by the Relative Strength Index (RSI), which stands above the midline near 61.40, displaying bullish momentum in the near term. 

On the bright side, the first upside barrier emerges at 0.8722, the upper boundary of the Bollinger Band. Sustained trading above this level could pick up more momentum and aim for 0.8765, the high of November 20, 2023. Further north, the next resistance level is seen at 0.8864, the high of April 17, 2023. 

In the bearish case, the low of July 18 at 0.8640 acts as an initial support level for EUR/GBP. A breach of this level could drag the cross toward the 0.8610-0.8600 zone, representing the low of July 11 and the psychological level. The additional downside filter to watch is 0.8542, the lower limit of the Bollinger Band.

EUR/GBP daily chart