FxWirePro: EUR/GBP tests 23.6% Fib, cloud breakout raises scope for upside

EUR/GBP chart - Trading View 

Spot Analysis:

EUR/GBP was trading 0.25% higher on the day at 0.8645 at around 10:40 GMT

Previous Week's High/ Low: 0.8579/ 0.8503

Previous Session's High/ Low: 0.8641/ 0.8562

Fundamental Overview:

BoE MPC members Haskel and Mann stated that the BoE should not tighten policy prematurely.

Members expressed concern that tightening policy prematurely will result in a weaker economic recovery.

Sterling remains vulnerable as the ongoing spike in Delta coronavirus strain could potentially cause serious headwinds.

In the latest development, the UK Health Minister Sajid Javid tested positive for COVID-19.

Pound undermined by dovish comments yesterday from BoE officials and ongoing virus concerns.

Technical Analysis:

- EUR/GBP has shown a decisive break above daily cloud, opening upside

- Stochs and RSI are sharply higher and show bullish momentum

- GMMA indicator shows near-term trend has turned bullish

- Price action has bounced off major trendline support

- MACD shows bullish crossover on signal line and ADX supports gains

Summary: Price action has tested 23.6% Fib at 0.8650, scope for further upside. Next major bull target lies at 0.8760. Bullish invalidation likely on retrace below cloud.