EUR/GBP Price Analysis: Bulls look out for day-trade cues and target daily resistance

• EUR/GBP downside has decelerated and bullish prospects are showing across the time frames. 
• Bulls are on the look-out for a break above the 20-SMA to target a daily correction and confluence. 

Further to the prior analysis, EUR/GBP Price Analysis: Bulls target confluence of monthly resistance area, the price has yet to show significant evidence of deceleration. 

As a recap, there were bullish prospects from the chart patterns left on the longer-term time frames:

The monthly offers the prospects of a right-hand shoulder ina bullish Head and Shoulders pattern as well as the bullish M-formation. 

The weekly chart above offers the prospects of a significant Fibonacci retracement to the prior support structure.

It is also offering bullish M-formation in the prior series of candles which is more clearly marked out below:

Day-trading cues

However, we now have further confluence that adds additional conviction for the thesis of a retest of monthly resistance.

In European trade, the price extended to the downside to form an overextended M-formation on the daily chart as well for those that may wish to participate in a shorter-term time frame trading set-up.

1-hour chart

In order to participate in such an outlook, a lower time frame, such as the 1-hour chart, can be used to identify bullish support structure from which to long the market.

Bulls will want to wait for bullish conditions signified by technical indicators, such as RSI, Momentum, or MACD with the price above the 20 simple moving average, supported by a shorter average, such as the 8 or 10. 

 As illustrated in the chart above, the price is yet to show signs of bullishness, although it is clearly decelerating and consolidating.

A break above the recent highs and the 20-SMA opens prospects of a higher probability trade to the 38.2% Fibonacci retracement of the bearish impulse.

A 50% mean reversion is slightly higher-up which has a stronger confluence with the neckline of the daily M-formation. 

On a break of the 50% mean reversion, bulls will be more convinced of a continuation to the weekly and monthly target.