- The post-BoE selloff in the British pound assisted EUR/GBP to gain traction.
- The momentum assisted the cross to break through the 0.9000 key barrier.
- The set-up favours bulls and supports prospects for a further positive move.
The EUR/GBP cross caught some aggressive bids on Thursday and surged through an important barrier near the key 0.9000 psychological mark. The post-BoE selling around the sterling was seen as one of the key factors behind the pair’s goodish intraday positive move.
Technical indicators on 4-hourly/daily charts have been gaining traction and support prospects for a further near-term appreciating move. However, RSI (14) on the 1-hourly chart is already flashing overbought conditions and warrant caution for bullish traders.
Hence, it will be prudent to wait for some near-term consolidation or a modest pullback to the mentioned resistance breakpoint before placing fresh bullish bets. This will set the stage for an extension of the recent bounce from the 0.8865 strong support.
The near-term technical set-up remains firmly tilted in favour of bullish traders. Hence, any dip towards the 0.9000 mark might still be seen as a buying opportunity. This, in turn, should help limit any meaningful, rather be limited near the 0.8980 horizontal zone.
On the upside, bulls might aim for a move back towards retesting May monthly highs resistance near the 0.9050-55 region. The momentum could then get extended and set the stage for the cross to climb further towards reclaiming the 0.9100 round-figure mark.
EUR/GBP 4-hourly chart
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Technical levels to watch
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