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EUR/GBP Price Analysis: Breaks through a one-month old descending channel

  • EUR/GBP built on its goodish intraday positive move and shot to near two-week tops.
  • The technical set-up favours bullish traders and supports prospects for additional gains.

The EUR/GBP cross added to its intraday gains and climbed further beyond the 0.9100 round-figure mark, hitting near two-week tops in the last hour.

Given that the cross has been showing some resilience below 100-day SMA, sustained move beyond a one-month-old descending channel seemed to have prompted some technical buying. The near-term bullish breakout is further reinforced by the fact that technical indicators on the daily chart have just started gaining positive momentum.

The set-up might have already shifted back in favour of bullish traders and momentum seems strong enough to push the pair back towards monthly swing highs, around the 0.9160 region. Some follow-through buying has the potential to lift the EUR/GBP cross further beyond the 0.9200 round-figure mark, towards the 0.9220 resistance zone.

On the flip side, any pullback from higher levels might now be seen as a buying opportunity and remain limited near the 0.9100-0.9090 region. That said, failure to defend the mentioned support might turn the EUR/GBP cross vulnerable to slide back to challenge 100-day SMA support, currently near the 0.9040 region, en-route the key 0.9000 psychological mark.

EUR/GBP daily chart

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Technical levels to watch

 

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