EUR/GBP started this week with a slide that broke below a rising trendline and initiated a bearish continuation scenario. However, as we wind down the week, we are seeing bulls take back control and threaten a key resistance.
The 4H chart shows that after the breakout, price held above 0.7225 and was able to rally back above this week’s highs around 0.7340. Price looks poised to retest the highs around 0.7384. It if does, it essentially sets up a range between 0.7384 and 0.7225. A break above 0.7384 would not only signal a bullish continuation in the short-term, but likely a bullish correction in the medium-term.
When we look at the daily chart, we can see that price would essentially break above a falling trendline and the daily RSI would push above 60. This shows loss of bearish price structure and momentum. Still, with the prevailing bearish trend still being the dominant mode, we should first limit the bullish outlook towards the 0.7450 pivot. If price starts to hold above 0.73, we can build more confidence for the bullish outlook towards the 0.7550-0.76 area.
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