EURGBP enters bullish zone but key resistance ahead


EURGBP is entering bullish territory as the price is deviating above its shorter-term moving averages (SMAs) at the same time the MACD is turning positive after 5 months. The RSI and the red Tenkan-sen line are resuming their positive momentum, backing this view as well.

Before turning optimistic however,  the price should first clear the key 0.8600-0.8655 resistance area as any failure to surpass that region could shift the spotlight back to the 0.8470 support level. Lower, the December 9 trough of 0.8392 may also intervene before a stronger barrier around 0.8300 takes over. If the latter fails to hold, the way could open towards the 0.8160-0.8100 former restrictive zone, strengthening the negative outlook in the medium-term picture too.

Alternatively, a decisive close above 0.8655, the Ichimoku cloud, and the 38.2% Fibonacci of the 0.9323-0.8275 bearish wave could increase speculation over an up-trending market, pushing resistance probably towards the 200-day SMA and the 50% Fibonacci of 0.8797. Breaking that obstacle, the next target could be the 61.8% Fibonacci of 0.8923.

Summarizing, buying pressure seems to be increasing in the EURGBP market, though traders could wait for a decisive close above 0.8655 to confirm the sustainability of the current upside move.

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