EURGBP has developed a fresh ascending channel pattern following its recent rally, with the cross-currency pair currently trading around 0.86178 after pulling back from channel resistance.
The newly formed ascending channel suggests that the bullish momentum remains intact, though price appears to be consolidating near the upper boundary before the next directional move.
Key Fibonacci retracement levels are now coming into focus as potential support zones where buyers could re-enter the market. The 38.2% retracement at 0.86091 represents the first area of interest, coinciding with recent consolidation levels that could attract renewed buying pressure.
A deeper correction might find support at the 50% Fibonacci level at 0.85894, which aligns with the ascending channel’s mid-point and could serve as a stronger foundation for the next leg higher.
The most significant pullback scenario would target the 61.8% retracement at 0.85697, which sits near the ascending channel’s lower boundary and represents a confluence of technical support levels. This zone could act as the final line of defense for bulls before considering a more neutral outlook.
Moving averages continue to support the bullish bias, with the shorter-term average maintaining its position above the longer-term indicator. This configuration suggests that any pullback would likely be viewed as a buying opportunity rather than a trend reversal.
The stochastic oscillator is retreating from overbought levels, indicating that selling pressure has emerged in the near term. However, the RSI remains in healthy territory with room to decline during a corrective phase without compromising the overall bullish structure established by the ascending channel formation.
Earlier in the week, GBP sold off on UK gilts tumbling after Chancellor Reeves showed concern about the scaled down government plans to trim benefits. However, sterling found footing on UK PM Starmer’s reassurances about Reeves’ leadership.
Meanwhile, data points from the eurozone have been mixed, with Germany’s figures surprising mostly to the downside, although other top economies have reported resilience.