EURGBP hits new multi-month highs, on track for eventual clear break of pivotal Fibo barrier
EURGBP holds firm bullish tone and extends fresh bullish acceleration into second consecutive day, trading at the highest levels since late April on Thursday morning.
The cross gained pace after lower than expected UK inflation in October deflated pound on fading expectations for further policy tightening.
Fresh advance is holding comfortably above pivotal Fibo level at 0.8735 (50% retracement of 0.8978/0.8492 downtrend) and on track to register eventual firm break above this level, after several attempts in past one month stalled here.
Rising positive momentum and moving averages in full bullish configuration on daily chart support the action, with close above 0.8735 and penetration into thickening weekly cloud (cloud base lays at 0.8765) to confirm bullish signal for test of next targets at 0.8792/0.8808 (Fibo 61.8% / weekly cloud top).
Broken Fibo 50% (0.8735) reverted to solid support and should hold to keep bulls intact,.
Conversely, another failure here would question bulls and add to risk of another bull-trap, though deeper drop and violation of rising 10DMA (0.8713) will be needed to weaken near-term structure and shift focus to the downside.
Res: 0.8765; 0.8792; 0.8808; 0.8863
Sup: 0.8735; 0.8713; 0.8705; 0.8688