EURGBP has recorded a bullish trend from a yearly low of 0.8279. The ascending channel created from April saw a pause at the beginning of last month. We then witnessed a bounce at the 23.6% long term (0.6921/0.9502 leg) and 38.2% short term (0.9273/0.8279 leg) Fibonacci confluence level.
This led prices back within the channel and towards the median regression. This was supported by a bullish divergence on the momentum indicator. We will now look for further indications if the level at the pin bar candle will be attempted again or if a false break has occurred.
If bias remains to the upside, then further fresh highs will be evident above the median regression.
In the short-term, bears could keep prices moving towards the low of the ascending channel. This could be the next target if we see that momentum becomes exhausted.
The 2-hour chart brings into play a Fibonacci from the 0.9497 to the 0.8671 bearish leg.
Should prices fall into the lower channel/61.8% Fibonacci confluence area, then the next target would be 50%. This would mean prices dropping under the 0.91 psychological area.
Further downside would then test the 0.8893 confluence level.
In this area we could expect a bounce to once again test the lower ascending channel towards the 0.92 region. If we see further resistance, then a move to recent lows seen at the beginning of the channel could come into play.
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