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Fan Yang

EUR/GBP Passes Key Resistance

EUR/GBP has been bullish since April, and is now signaling bullish continuation after more than half a year of consolidation/bearish correction.

EUR/GBP Daily Chart

(click to enlarge)

Shifting Trend:

- As we can see on the daily chart, price action was bearish to end 2016 (bearish correction).
- Then it started to trade sideways in 2017 (range consolidation).
- In June, price came up to a key resistance at 0.8850 and spent a few weeks consolidating just under this resistance.
- During the 7/11 session, price broke above this key resistance, shifting the mode from range consolidation to possible bullish continuation.
Positive Reversal:
- The daily chart also reveals a small clue that price was going to break this critical resistance and make at least another high.
- A positive reversal is when the RSI makes a lower low (after tagging or going above 70), while the price low becomes higher. 
- This suggests a higher high, which would mean a break of the critical resistance.
- With the breakout, the 2016 high around 0.92 is in sight .
- Also if we have any major correction during this bullish continuation swing, the 0.8630 area would be a critical support, IF the mode is indeed bullish. 
- A break below 0.86 could signal further consolidation/bearish correction, and open up at least the 0.83 support.

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