The EURGBP is holding above a key level I wrote about on Monday.
I also mentioned how EURGBP could be bottoming last Friday.
The euro cross has been a bit stubborn, though.
We haven’t seen much follow-through from buyers following Monday’s rally of nearly 100 pips.
That said, the EURGBP is holding above 0.8450 on a daily closing basis.
This is the level I pointed out on Monday, where I stated that a retest of it as new support could trigger the next move higher.
But a word of caution here.
Wednesday’s candle is not a pin bar, nor is it all that bullish, in my opinion.
Things for the EURGBP looked relatively bullish earlier in Wednesday’s session, but buyers backed off into the close.
So will EURGBP move higher from here?
That is anyone’s guess.
As I always say, there are no guarantees in this business.
Monday’s rally may be nothing more than a bull trap within the broader downtrend.
However, I think traders also need to respect the bullish potential while above 0.8450, especially given the reasons I wrote about last Friday.
If you want to be conservative, though, it may be best to wait for a daily close above 0.8590 resistance.
It’s going to take a close above that level to garner the attention of would-be buyers, in my opinion.
As long as 0.8590 is intact as resistance, EURGBP bulls may struggle.
A move above 0.8590 would target 0.8680 and perhaps 0.8800.
Alternatively, a daily close below 0.8450 would signal more weakness, perhaps below recent lows at 0.8385.