- EUR/GBP gained some strong follow-through traction for the second straight session on Tuesday.
- The technical set-up seems tilted in favour of bulls and supports prospects for additional gains.
The EUR/GBP cross built on the previous day’s positive move and gained some strong follow-through traction for the second consecutive session on Tuesday.
A sustained move beyond the 50% Fibonacci level of the 0.9176-0.8939 downfall, around the 0.9055-60 region, was seen as a key trigger for intraday bullish traders. The subsequent move beyond the 61.8% Fibo. level lifted the cross to two-week tops in the last hour, with bulls now looking to extend the momentum beyond the 0.9100 mark.
The cross has now found acceptance above the mentioned level. This coupled with the fact that technical indicators on the daily chart have again started moving back into the bullish territory supports prospects for additional gains. However, extremely overbought conditions on hourly charts warrant some caution for bullish traders.
Hence, it will be prudent to wait for some near-term consolidation, or a modest pullback, which might still be seen as an opportunity to initiate fresh bullish positions. Nevertheless, the cross seems all set to aim back towards the recent daily closing high, around the 0.9140 region, en-route June monthly swing highs, around the 0.9175 area.
EUR/GBP 1-hourly chart
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Technical levels to watch
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