- EUR/GBP has been consolidating in a range, above 23.6% Fibo. level.
- The set-up still supports prospects for an eventually bullish breakout.
- A move beyond the 0.9000 mark needed to confirm the positive outlook.
The EUR/GBP cross continued with its struggle for a firm near-term direction and remained confined well within a one-week-old narrow trading band around mid-0.8900s. The range-bound price action comes on the back of the recent bounce from sub-0.8700 levels, or multi-week lows, and might still be categorized as a consolidation phase.
Given that the cross has managed to hold above the 23.6% Fibonacci level of the 0.9500-0.8671 fall, bullish oscillators on the daily chart support prospects for an eventual breakout on the upside. However, it will be prudent to wait for some follow-through buying beyond the key 0.90 psychological mark before placing fresh bullish bets.
The mentioned level coincides with 38.2% Fibo. level, which should now act as a key pivotal point for short-term traders and help determine the pair’s next leg of a directional move. The cross might then accelerate the move towards the 0.9060-65 intermediate resistance en-route the 50% Fibo. level near the 0.9100 round-figure mark.
On the flip side, any retracement back towards the 0.8900 round-figure mark might still be seen as a buying opportunity. This, in turn, should help limit any meaningful fall near 23.6% Fibo. level support, around the 0.8875 support. Failure to defend the mentioned support will negate the bullish bias and prompt some fresh selling.
EUR/GBP daily chart
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Technical levels to watch
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