Last week, the EUR/GBP currency pair had breached Fibonacci correctional level of 38.2. It is expected that currency pair will test the resistance level of 0.9160 soon.
Earlier on a weekly chart, the EUR/GBP had formed Hammer candlestick, thus indicating the bullish signal. The upward movement is supported by the fact that this candlestick formed near support level of 0.8070, where the bears did not manage to fixate, the bulls started to increase their influence, and a rebound happened.
This candlestick shows that the currency pair was declining after failed attempt to breach the resistance level of 0.9411. However, having come closer to 0.8067, it reversed.
The fact that the EUR/GBP had successfully breached Fibonacci correctional level of 23.6 confirms this viewpoint. The breakthrough of 0.8605 set a target to the resistance level of 0.9160 for the EUR/GBP, where Fibonacci correctional level of 61.8 is placed.
On the other hand, the long positions should be cut if the support level of 0.8070 is breached, as it will lead to decline to 0.7693 (October 2008 low).
