- EUR/GBP added to last week’s strong gains and climbed to 4-1/2 month tops.
- Bulls take a brief pause near 38.2% Fibo. amid slightly overbought conditions.
The EUR/GBP cross continued scaling higher through the mid-European session on Monday and jumped to 4-1/2 month tops, around the 0.8725-30 region in the last hour.
Last week’s sustained break through an important confluence resistance, around the 0.8500-0.8510 region, was seen as a key trigger for short-term bullish traders.
A subsequent strength beyond the 0.8600 round-figure mark provided an additional boost and remained supportive of the momentum for the third consecutive session.
Bulls took some breather near a resistance marked by 38.2% Fibonacci level of the 0.9398-0.8276 downfall, which is closely followed by the very important 200-day SMA.
Given that technical indicators on the daily chart are flashing slightly overbought conditions, the cross seems more likely to consolidate before the next leg of a positive move.
Meanwhile, any meaningful pullback might still be seen as a buying opportunity and help limit deeper losses near the 0.8665-60 strong horizontal support.
EUR/GBP daily chart
Technical levels to watch