- EUR / GBP is moving higher for the third day in a row on Thursday.
- The technical setup remains firmly tilted in favor of the bulls.
- Rising above the 0.8660 region will reaffirm the constructive outlook.
The EUR / GBP cross has gained positive traction for the third day in a row and has risen to new three-day highs, around the 0.8655 region, during Thursday’s European session.
Looking at the technical picture, the EUR / GBP cross showed some resistance below the 0.8600 level on Monday and halted its recent pullback from nearly two-month highs. The aforementioned level marks a confluence region comprising the 200-period SMA on the 4-hour chart and the 50% Fibonacci retracement of the upward move from 0.8472 to 0.8719. This should now act as a hot spot for short-term investors.
Meanwhile, the technical indicators on the daily chart have maintained their bullish bias and have been gaining positive traction on the hourly charts. This, in turn, supports prospects for an extension of the recent strong rebound from the more than one-year lows hit in early April. A subsequent move above the 23.6% Fibonacci retracement will reaffirm the constructive outlook and trigger some technical buying.
The EUR / GBP cross could accelerate the momentum towards the 0.8700 level. This is closely followed by resistance near the 0.8715-20 region and the 0.8740-50 resistance zone. Some subsequent buying will set the stage for a further short-term upward move and allow the bulls to aim to regain the round 0.8800 level for the first time since early February.
On the other hand, the 38.2% Fibonacci retracement, around the 0.8625 area, now appears to defend the immediate decline ahead of the confluence support at 0.8600. A convincing break below this region will negate any short-term positive bias and make the EUR / GBP cross vulnerable to test the 61.8% Fibonacci retracement near the 0.8565 region before finally sliding down to challenge the key psychological level. of 0.8500.
EUR / GBP 4-hour chart
EUR / GBP technical levels
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