- EUR / GBP picks up strength on Wednesday, although it remains in a three-day trading range.
- The facility still appears to be tilted in favor of the bulls and supports the prospect of further earnings.
- Failure to defend the 0.88875 support area could negate the positive short-term outlook.
The EUR / GBP cross regained some traction on Wednesday and recovered much of the negative movement from the previous day, although it remained well within a three-day trading range.
Since the crossover comfortably remains above the Fibonacci level of 23.6% from the drop of 0.9500-0.8671, trading action linked to the range could still be classified as a bullish consolidation.
This comes on the bullish technical indicators back on the hourly / daily charts, which adds credibility to the constructive configuration and supports the prospects of a new appreciation in the short term.
The cross seems ready to build on its recent rebound from levels below 0.8700 and aims to test the next obstacle near 38.2% of Fibo. level, just ahead of the key psychological mark of 0.9000.
On the other hand, the 0.8900 bar could now protect the immediate setback and is closely followed by 23.6% of Fibo. near the 0.8875 region, which, if broken, could result in technical sales.
A subsequent fall below the middle of 0.8800 will be considered a new trigger for bearish traders and will make the cross vulnerable to resume it before / well established downward trajectory.