EUR/GBP Price Analysis: Looks north with bearish channel breakout on daily chart

• EUR/GBP’s daily chart shows a bullish reversal pattern. 
• Key indicators favor an extension of Monday’s gains.

EUR/GBP broke out of a five-week-long bearish channel on Monday, confirming an end of the sell-off from the Sept. 11 high of 0.9292 and a reversal higher. 

The breakout from the descending trendline represented by trendlines connecting Sept. 11 and Sept. 23 highs and Sept. 17 and Sept. 28 lows looks more convincing if we consider the fact that a bullish hammer candle confirmed it. 

Supporting the breakout is the daily chart MACD histogram, which is about to cross into bullish territory above zero. Further, the 14-day relative strength index has risen back above 50, signaling bullish conditions. 

As such, the pair looks set to test the Oct. 7 high of 0.9162. The bullish bias would be invalidated if the pair find acceptance under Monday’s low of  0.9022. 

Daily chart

Trend: Bullish

Technical levels