- The EUR / GBP daily chart shows a bullish reversal pattern.
- Key indicators favor an extension of Monday’s gains.
EUR / GBP broke a five-week bearish channel on Monday, confirming the end of the decline from the 9/11 high of 0.9292 and a further turn to the upside.
The breakout of the downtrend line represented by the trend lines connecting the highs of September 11 and 23 and the lows of September 17 and 28 seems more compelling when we consider the fact that it was confirmed by a bullish hammer candle.
Supporting the breakout is the MACD histogram on the daily chart, which is about to cross into bullish territory above zero. Furthermore, the 14-day RSI has climbed back above 50, indicating bullish conditions.
As such, the pair appears poised to test the October 7 high at 0.9162. The bullish bias would be invalidated if the pair finds acceptance below Monday’s low of 0.9022.
EUR / GBP daily chart
Credits: Forex Street
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