EURGBP – larger bears to take a breather

EURGBP edges higher on Friday after fresh acceleration lower in past three days failed to clearly break Fibo support at 0.8552 (50% retracement of 0.8239/0.8865 rally, also weekly Ichimoku cloud base) and formed a bear-trap pattern on daily chart that paves the way for recovery.

The Euro remained at the back foot due to significant slowdown in Eurozone economic growth, persisting geopolitical uncertainty and higher energy cost, while sterling received boost from easing political uncertainty and signals that the BoE may keep higher interest rates for some time as inflation remains elevated.

Reversal pattern is developing on daily chart, though still requiring verification on longer bullish daily candle on Friday and daily close minimum above 0.8580 Fibo 23.6% of 0.8689/0.8545 bear-leg).

Significant bullish developments can be seen on hourly chart that contribute to reversal scenario, while daily studies are still mixed (MAs in bearish configuration vs RSI reversing from oversold zone) that way obstruct recovery attempts.

Lift above 0.8580 to expose more significant barrier at 0.8600 (Fibo 38.2% / 10DMA), violation of which to generate stronger bullish signal.

On the other hand, recovery stall under 0.8600 to keep larger bears in play and provide better levels to re-enter bearish market.

Res: 0.8580; 0.8600; 0.8620; 0.8634
Sup: 0.8545; 0.8507; 0.8478; 0.8458