Clings to gains near session tops, above mid-0.8900s

EUR/GBP gains some follow-through traction for the second straight session on Thursday.
The set-up favours bullish traders and supports prospects for a move towards 0.9000 mark.
Any meaningful corrective slide might continue to find decent support near the 0.8865 region.

The EUR/GBP cross edged higher for the second consecutive session and built on this week’s bounce from the 0.8865 support area. The mentioned region marks a previous strong horizontal resistance and the lower end of a one-month-old ascending trend-channel.

A subsequent move beyond mid-0.8900s might have already set the stage for additional gains. The cross now seems poised to aim back towards reclaiming the key 0.9000 psychological mark amid the post-ECB pickup in the buying surrounding the shared currency.

The common currency gained some strong traction and strengthened across the board after the ECB increased the size of its Pandemic Emergency Purchase Programme (PEPP) by €600 billion, higher than €500 billion expected by the market participants.

Meanwhile, technical indicators on the daily chart maintained their bullish bias and have again started gaining positive traction on hourly charts. This further reinforces the constructive set-up, which seems firmly in favour of bullish traders.

On the flip side, the 0.8930-20 region now seems to protect the immediate downside, which if broken might drag the cross to the 0.8900 mark. Any subsequent fall might still be seen as a buying opportunity and help limit the slide near the 0.8865 support.

A convincing breakthrough the trend-channel will be seen as a fresh trigger for bearish traders and would indicate that the recent recovery move has run out of the steam. This, in turn, might pave the way for a slide towards testing sub-0.8800 levels.