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  • EUR/GBP continued to gain traction on Thursday and jumped to near two-month tops.
  • The near-term technical set-up favours bulls and supports prospects for additional gains.
  • Any pullback might still be seen as a buying opportunity and help limit the downside.

A sudden pickup in the shared currency lifted the EUR/GBP cross to near two-month tops during the mid-European session on Thursday. Bulls might now be looking to extend the momentum further beyond the key 0.9000 psychological mark.

The mentioned level marks the 38.2% Fibonacci level of the 0.9500-0.8671 fall. A convincing breakthrough will be seen as a fresh trigger for bullish traders and set the stage for an extension of the recent rally from sub-0.8700 levels.

Meanwhile, oscillators on the daily chart maintained their bullish bias and are still away from extremely overbought conditions. The set-up seems tilted in favour of bulls and support prospects for a further near-term appreciating move. Hence, a subsequent strength towards the 0.9060-65 intermediate resistance, en-route 50% Fibo. level near the 0.9100 round-figure mark, looks a distinct possibility.

On the flip side, the 0.8960-50 region now seems to protect the immediate downside, which if broken might accelerate the fall back towards the weekly lows support near the 0.8900-0.8895 area. Any subsequent fall might still be seen as a buying opportunity and should help limit the downside near 23.6% Fibo. level, around the 0.8875 zone.

Failure to defend the mentioned support levels, leading to a subsequent weakness below mid-0.8800s might negate any near-term bullish bias 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