EUR/GBP has recently rebounded after touching the lower channel line of its rising channel, indicating a mild bullish bias as prices slowly move higher. The chart shows that the currency pair is bouncing off the lower channel line of its shallow rising channel and continuing to push higher. Price has been respecting the confines of the recovery channel that began at the August 30 lows, gradually climbing higher and suggesting the establishment of a new short-term uptrend.
The Moving Average Convergence Divergence (MACD) momentum indicator remains above the zero line, signaling a mild bullishness in price dynamics. To confirm an upside breakout from the channel, a close above the 0.8464 high from September 11 would be necessary. If this occurs, it is likely that the currency pair could reach around 0.8477, which is the 0.618 Fibonacci (Fib) extension of the height of the channel extrapolated higher. The current bullish signs slightly outweigh the bearish ones, as EUR/GBP is rising within a bullish channel, has moved past a previous falling channel, and shows a bullish reversal sign from the exhaustion break during August.
Despite the bullish indicators, the main bearish sign is the relative shallowness of the rising channel compared to the steep previous bear move. A close below 0.8423 from September 10 could lead to further weakness and a downside target at 0.8406, the 0.618 Fib extension lower. Overall, the EUR/GBP pair seems to be experiencing a gradual uptrend, with indications of potential further bullish movement. Traders should monitor key levels and breakout points to gauge the strength of the bullish momentum and potential downside risks in the market.
