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  • EUR/GBP gains some traction and recovers further from weekly lows set on Thursday.
  • The set-up favours bulls and supports prospects for a move towards the 0.9100 mark.
  • A convincing break below the 0.9000 mark will negate the near-term bullish outlook.

The EUR/GBP cross regained some positive traction on Friday and has now recovered the previous day’s negative move to weekly tops.

The cross on Thursday managed to find decent support near a previous strong resistance breakpoint, around the key 0.9000 psychological mark. The mentioned level should now act as a key pivotal point for short-term traders and help determine the pair’s next leg of a directional move.

Meanwhile, the emergence of some dip-buying near the resistance-turned-support still favours bullish traders. The price action further suggests that the recent move up witnessed over the past two months or so might not have run out of the steam yet and supports prospects for additional gains.

This coupled with the fact that technical indicators on the daily chart maintained their bullish bias add credence to the constructive set-up. Adding to this, oscillators on hourly charts have again started gaining positive traction and further reinforce the bullish outlook for the cross.

Some follow-through strength beyond the 0.9050-60 supply zone will be seen as a fresh trigger for bullish traders and might now assist the pair to surpass three-month tops, around the 0.9075-80 region. The momentum could further get extended towards reclaiming the 0.9100 round-figure mark.

Alternatively, a convincing breakthrough the 0.9000 mark will negate the bullish set-up. A subsequent slide below the 0.8980 horizontal support might now turn the cross vulnerable to accelerate the fall further towards mid-0.8900s en-route the 0.8910 support zone.

EUR/GBP 4-hourly chart

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Technical levels to watch