EUR/GBP: Strong bullish signal is developing following a break above daily cloud
|The cross rose over 0.5% on Monday and hit 8-day high, on a biggest one-day rally in one month.
Sterling, as more risk-sensitive currency than the euro, reacted negatively on strong risk aversion that pushed global equities sharply lower.
Today’s rally completed reversal pattern on a daily chart, signaling an end of multi-day congestion, while surge above daily cloud (spanned between 0.8525 and 0.8559) suggest that bulls regained control, with close above daily cloud top to confirm and generate strong bullish signal.
Improving daily studies (north-heading 14-d momentum is about to break into positive territory and MA turned to bullish setup) support the action.
Fresh bullish acceleration has so far retraced over 61.8% of 0.8613/0.8500 bear-leg) and pressuring next Fibo barrier at 0.8587 (76.4%) violation of which would open way towards key resistance at 0.8613 Sep 7 high).
Broken cloud top reverted to significant support which should keep the downside protected.
Res: 0.8595; 0.8609; 0.8633; 0.8642
Sup: 0.8569; 0.8559; 0.8543; 0.8525
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.