EURGBP sees strong bullish momentum after a negative week
2023.02.15 05:08
revived its bullish momentum on Wednesday after a week of losses, which pressured the pair from February’s high of 0.8978 to the 0.8800 round level.
The pair is aiming to preserve strength above the short-term support trendline around 0.8820 and hold within the bullish channel. If it snaps the 38.2% Fibonacci retracement of the former 0.8201-0.9249 uptrend at 0.8850 too, the recovery may stretch towards the 23.6% Fibonacci of 0.9000 and the channel’s upper surface. Some consolidation around January’s resistance of 0.8895 cannot be excluded. Beyond 0.9000, the spotlight will fall on 0.9065, where the market faced strong rejection last September.
Technically, the market has not confirmed a bullish bias yet. The latest rebound in the RSI and the stochastic oscillator is still in progress, with the former remaining close to its 50 neutral mark and the latter barely increasing above its 30 oversold level.
A pullback below the 0.8800 number could prompt an aggressive decline towards the 50% Fibonacci of 0.8725, where January’s sharp downfall stalled. A continuation lower may immediately stabilize around the descending line from mid-December currently at 0.8700 before meeting the 200-day simple moving average (SMA) at 0.8645. Note that the line maintains a golden cross with the 50-day SMA, feeding hopes that the uptrend from August will resume.
In brief, EURGBP is setting a foothold for its next bullish wave. A close above 0.8895 could clear the way towards the 0.9000 level.
