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Bulls remain in full control near multi-month tops, approaching 200-DMA

  • 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

 

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