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  • EUR/GBP confirmed a bull Doji reversal higher on Thursday. 
  • The pair is better bid near 0.87 at press time. 

The path of least resistance for EUR/GBP is on the higher, according to technical studies. 

The pair jumped 0.87% on Thursday, marking a positive follow-through to the bear fatigue signaled by Wednesday’s long-tailed Doji candle. In other words, Thursday’s gain confirmed a bullish Doji reversal pattern. 

The reversal higher signaled by the candlestick pattern is backed by a breakout on the widely-tracked 14-day Relative Strength Index, a momentum indicator. 

The RSI has breached a 2-1/2-month descending trendline, implying an end of the bearish trend from December highs above 0.92. 

The pair could challenge resistance at 0.8866 (Sept. 3 low) next week. A close under 0.8539 (Wednesday’s low) would invalidate the bullish bias. 

Daily chart

Trend: Bullish

Technical levels

 

Expert score

5

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