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The EURGBP has a decision to make.
Either follow through on this recent break above descending channel resistance or close back below it.
I wrote about this on Monday as the pair was breaking out.
If you saw that post, you know that a higher EURGBP is contingent on more than clearing channel resistance.
The 0.8590 horizontal level is also a factor.
You can see how this level has helped direct the price action here since last October.
Notice where Tuesday’s session encountered sellers.
However, we haven’t seen EURGBP buyers give up on the recent breakout from this descending channel either.
So will the pair break higher or lower?
That’s anyone’s guess.
I know many of you would love to hear me say this pair will move one way or the other, but that’s gambling, not trading.
I have to respect either outcome regardless of what the market is signaling.
That said, as long as the EURGBP is above the channel top near 0.8530, I have to respect the bullish potential.
Just remember that a daily close above 0.8590 is still required to garner the attention of would-be buyers.
As long as 0.8590 is intact, a conservative approach is warranted, in my opinion.
A daily close above 0.8590 would expose 0.8680 followed by 0.8800.
Alternatively, a daily close back below the descending channel top near 0.8530 would negate the bullish scenario and re-expose 0.8460.