EURGBP has formed higher lows connected by a rising trend line that’s been holding since the middle of this month. Price is testing support and looks ready to resume the climb.

The 50% level near the 100 SMA dynamic inflection point seems to have kept losses in check, possibly sending EURGBP back up to the swing high just past the .8700 major psychological mark. A larger pullback could still test the 61.8% Fib at .8657.

The 100 SMA is above the 200 SMA to confirm that the path of least resistance is to the upside or that the climb is more likely to gain traction than to reverse. In addition, the gap between the indicators is widening to reflect strengthening bullish pressure.

Stochastic is already on the move up to show that buyers have the upper hand and could stay on top of their game until overbought conditions are met. RSI is also heading higher and has plenty of room to climb before reflecting exhaustion among buyers.

There’s not much in the way of top-tier reports from both the eurozone and UK economy this week, so this pair might take cues from current fundamental factors.

Recall that the BOE decided to keep rates on hold during their latest policy decision, signaling a surprise shift to a less hawkish bias. This could continue to keep a lid on GBP rallies in the near-term, as the BOE has previously been one of the last remaining aggressive central banks.

With that, any signs of improvement and growth in the euro region might spark hopes for another ECB hike, especially since policymakers still seem inclined to resume their tightening cycle if needed. Risk-off flows could also benefit the euro, which is typically treated as a safe-haven currency in the European region.