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  • EUR/GBP regains traction on Wednesday, albeit remains in a three-day-old trading range.
  • The set-up still seems tilted in favour of bulls and supports prospects for additional gains.
  • Failure to defend the 0.8875 support zone might negate the near-term positive outlook.

The EUR/GBP cross regained some traction on Wednesday and recovered a major part of the previous day’s negative move, albeit remained well within a three-day-old trading range.

Given that the cross is holding comfortably above 23.6% Fibonacci level of the 0.9500-0.8671 fall, the range-bound trading action might still be categorized a bullish consolidation.

This comes on the back bullish technical indicators on hourly/daily charts, which adds credence to the constructive set-up and supports prospects for a further near-term appreciating move.

The cross seems poised to build on its recent bounce from sub-0.8700 levels and aim to test the next hurdle near the 38.2% Fibo. level, just ahead of the key 0.9000 psychological mark.

On the flip side, the 0.8900 mark might now protect the immediate downside and is closely followed by 23.6% Fibo. near the 0.8875 region, which if broken might prompt some technical selling.

A subsequent fall below mid-0.8800s will be seen as a fresh trigger for bearish traders and turn the cross vulnerable to resume it prior/well-established downward trajectory.

EUR/GBP daily chart

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Technical levels to watch