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  • EUR/GBP gained some follow-through traction for the second straight session on Tuesday.
  • The set-up favours bulls and supports prospects for a breakthrough a descending channel.
  • Any meaningful slide might continue to attract some dip-buying near the 0.9060-50 area.

The emergence of some fresh selling around the British pound pushed the EUR/GBP cross back above the 0.9100 round-figure mark, or two-day tops in the last hour. The uptick marked the second consecutive day of a positive move and was further supported by a modest pickup in demand for the shared currency.

From a technical perspective, any subsequent positive move is likely to confront a stiff resistance near the top boundary of a one-month-old downward sloping channel. That said, a convincing breakthrough will be seen as a fresh trigger for bullish traders and pave the way for a further appreciating move.

Meanwhile, technical indicators on the daily chart – though have been losing traction – maintained their bullish bias and support prospects for an eventual breakthrough the trend-channel. However, it will be prudent to wait for a sustained strength beyond the mentioned barrier before placing any aggressive bullish bets.

On the flip side, any meaningful slide might continue to attract some dip-buying near the 0.9060-50 region. Failure to defend the mentioned support might prompt some technical selling and drag the EUR/GBP cross back towards last week’s swing lows, around the 0.9025 region, en-route the key 0.9000 psychological mark.

Some follow-through selling will negate any near-term bullish bias and pave the way for an extension of the recent pullback from the vicinity of the 0.9300 mark, or near six-month tops touched on September 11th.

EUR/GBP 4-hourly chart


Technical levels to watch