EUR/GBP has been trading north since yesterday, staying above the upper bound of the prior downside channel that contained most of the price action from the last days of September 2017 until the 17th of July 2018. This, combined with the fact that the rate continues to trade above the uptrend line drawn from the low of the 17th of April, suggests that the medium -term outlook remains positive.
Currently, the rate looks to be heading towards the 0.8960 resistance barrier, defined by the peak of the 20th of July. If the bulls prove strong enough to overcome that level, then such a break will confirm a forthcoming higher high on the daily chart and perhaps open the way towards our next resistance of 0.9015, marked by the peak of the 15th of November. Another break above the 0.9030 line could carry more bullish extensions and is possible to set the stage for the 0.9120 zone, near the peak of the 11th of September.
Looking at our daily oscillators, we see that the RSI rebounded from near its 50 line and now looks to be heading towards 70, while the MACD, although below its trigger line, stands positive and shows signs that it could turn up again. It may cross back above its trigger line soon. These indicators detect upside momentum and support the notion for EUR/GBP to continue its upside trajectory for a while more.
On the downside, even if the rate slips below 0.8875, we would still see a cautiously positive picture. We would still see a decent chance for the bulls to jump in from the upper bound of the aforementioned channel, or from near the uptrend line taken from the low of the 17th of April. We would like to see a clear close below 0.8800 before we start examining whether the outlook has turned bearish. Such a move could confirm that the rate is back within the channel and is possible to pave the way for our next support zone of 0.8725.
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