Surrenders early gains to 6-week tops, bullish bias remains

EUR/GBP failed to capitalize on its early positive move to multi-week tops.
The near-term technical set-up remains tilted in favour of bullish traders.

The EUR/GBP cross failed to capitalize on its early positive move to six-week tops and is currently placed near the lower end of its daily trading range, around the 0.8535 region.

Meanwhile, the positive momentum once again faltered near the 0.8575-80 supply zone, which should now act as a key pivotal point and help determine the near-term trajectory.

Given the pair’s recent strong rally of around 200 pips over the past two weeks, overbought conditions on hourly charts seemed to be the only factor prompting some profit-taking.

However, oscillators on the daily chart are holding in the bullish territory and far from being in the overbought zone, which supports prospects for the emergence of some dip-buying.

The overnight sustained breakthrough a confluence barrier – comprising of 50-day SMA and over one-month-old descending trend-line – add credence to the constructive outlook.

A subsequent move beyond 100-day SMA – for the first time in nearly five months – also favours bulls and support prospects for an eventual break through the mentioned barrier.