EURGBP – bulls regain traction and return above daily cloud

EURGBP jumps 0.3% on Wednesday as Euro gets inflated by weaker dollar and expectations that the ECB will join the trend of policy tightening by the major central banks, while the Bank of England is likely to keep more cautious approach and probably keep rates on hold that keeps sterling in defense.

Fresh strength retraces over 61.8% of 0.8607/0.8564 pullback that partially offsets negative signal from bull-trap pattern on daily chart (failure to sustain gains above 0.8600 – Fibo 61.8% of 0.8689/0.8454 / 100DMA).

Bounce and likely repeated close above daily Ichimoku cloud (0.8572) supports the notion, but sustained break above 0.8600 pivot is still required to bring bulls fully in play and generate initial signal of bullish continuation of rally from 0.8454 (July 15 low).

Predominantly bullish daily technical studies, particularly while the price holds above daily cloud top, supports positive near-term outlook.

Res: 0.8600; 0.8617; 0.8634; 0.8651
Sup: 0.8572; 0.8564; 0.8547; 0.8528