- EUR/GBP has rebounded after touching the lower channel line of its rising channel.
- The chart suggests a mild bullish bias as price slowly makes steps higher.
EUR/GBP bounces off the lower channel line of its shallow rising channel and pushes higher.
Price continues to respect the confines of the recovery channel which began at the August 30 lows. Little by little, it climbs higher, suggesting a new short-term uptrend is taking root.
EUR/GBP 4-hour Chart
The Moving Average Convergence Divergence (MACD) momentum indicator stays above the zero line indicating a mild bullishness to price dynamics.
A close above the 0.8464 high (September 11 high) would be required to confirm an upside breakout from the channel. Such a move would likely reach about 0.8477, the 0.618 Fibonacci (Fib) extension of the height of the channel extrapolated higher.
Bullish signs now marginally outweigh bearish. For starters EUR/GBP keeps rising within a bullish channel, secondly it has now worked its way through the previous falling channel, and finally the exhaustion break during August (orange shaded circle) – when it accelerated to the downside – is a bullish reversal sign.
The main bearish sign is the relative shallowness of the rising channel in comparison to the much steeper previous bear move.
A close below 0.8423 (September 10 low) would pave the way for further weakness to a downside target at 0.8406, the 0.618 Fib extension lower.
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