- EUR/GBP is now looking to build on the previous session’s bounce from multi-month lows.
- Mixed oscillators on hourly/daily charts warrant some caution for aggressive bullish traders.
- The 0.8800 mark to act as an immediate resistance ahead of descending trend-channel hurdle.
The EUR/GBP cross edged higher for the second consecutive session on Monday and is now looking to build on its recovery from the 0.8740-35 support, or multi-month lows touched last week. The mentioned level marks the lower boundary of over three-week-old descending trend-channel.
Meanwhile, technical indicators on the 1-hourly chart have just started gaining positive traction but are yet to confirm a bullish bias on the 4-hourly chart. Moreover, oscillators on the daily chart are still holding deep in the bearish territory, warranting caution before placing any bullish bets.
Hence, any subsequent move up might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the 0.8800 mark. This is closely followed by the trend-channel hurdle, around the 0.8820 region, which should further collaborate to cap the upside for the EUR/GBP cross.
On the flip side, the daily swing lows, around the 0.8760-55 region, now seems to protect the immediate downside ahead of the trend-channel support. The latter is currently pegged near the 0.8725-20 region, which if broken will be seen as a fresh trigger for bearish traders.
The EUR/GBP cross might then turn vulnerable to break below the 0.8700 round-figure mark and accelerate the downward trajectory further towards April 2020 swing lows, around the 0.8670 region.
EUR/GBP 4-hourly chart
Technical levels to watch
