- EUR / GBP formed a solid base near the 200 hourly simple moving average and jumped to new weekly highs.
- The technical setup already seems to have shifted in favor of bullish traders.
- The RSI on the 1 hour chart deserves some caution before making any new bullish bets.
The crossing EUR/GBP it caught some new offers during the early North American session and spiked to new weekly highs, around the 0.9085 region in the last hour.
Momentum marked a bullish breakout through a two-day trading range around the 200 hourly SMA and pushed the EUR / GBP cross past overnight highs. Subsequent force beyond the 50% Fibonacci level of the recent 0.9215-20 double-top resistance pullback could have already set the stage for further gains.
The constructive outlook is reinforced by the fact that technical indicators have started to gain positive traction again on the 4-hour / day charts. However, the RSI on the 1 hour chart remains close to the overbought territory and warrants some caution before positioning itself for any further intraday appreciation moves.
That said, the EUR / GBP still appears poised to take advantage of its recent bounce from the month-long highs, around the 0.8930 region touched last Thursday. Therefore, a follow-up positive move beyond the 0.9090 congestion zone, en route to the 61.8% Fibonacci level, just above 0.9100, now seems like a clear possibility.
On the other hand, the horizontal level of 0.9055 now seems to protect the immediate drop. This is closely followed by the 38.2% Fibonacci level and the 200 hourly SMA, currently near the 0.9025 region. Failure to defend the mentioned support levels will nullify the positive outlook and make the EUR / GBP cross vulnerable to further decline.
1 hour chart