Bulls challenge a one-month-old descending channel resistance

EUR/GBP gained traction for the third consecutive session on Wednesday.
The set-up favours bullish traders and supports prospects for further gains.
Any dip below the 0.9100 mark might now be seen as a buying opportunity.

The EUR/GBP cross edged higher for the third consecutive session on Wednesday and was last seen hovering near the top end of its weekly trading range, around the 0.9120-25 region. The mentioned level marks an important confluence resistance, which if cleared decisively will be seen as a fresh trigger for bullish traders.

The mentioned region marks an important confluence hurdle – comprising of the top end of a one-month-old descending trend-channel, 100-period SMA on the 4-hourly chart and the 38.2% Fibonacci level of the 0.9292-0.9025 recent fall. A sustained move beyond will be seen as a key trigger for bulls and pave the way for additional gains.

Meanwhile, technical indicators on the daily chart maintained their bullish bias and have again started gaining positive traction on the 4-hourly chart. The set-up favours bullish traders and supports prospects for an eventual break through the said confluence resistance.

The EUR/GBP cross might then aim to surpass the 0.9155 supply zone and accelerate the momentum further towards reclaiming the 0.9200 round-figure mark. Some follow-through buying has the potential to lift the cross towards the 0.9255-60 region (daily closing high recorded on September 11th) en-route September monthly swing highs, around the 0.9290 region.

On the flip side, the 0.9100-0.9095 region now seems to protect the immediate downside. Any subsequent fall might still be seen as a buying opportunity, which, in turn, should help limit losses near the 0.9060-50 region. Failure to defend the mentioned support levels will negate any near-term bullish bias and shift the bias back in favour of bearish traders.