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The Euro continues its rebound against the British Pound, driven by strengthening bullish momentum.
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Support for the Euro emerges following optimistic remarks from ECB President Lagarde at Jackson Hole.
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EUR/GBP maintains an upward trajectory, targeting 0.8680 with a potential move toward 0.8710.
The Euro has rebounded from the lower boundary of its six-week trading range around 0.8600 against the British Pound, with EUR/GBP maintaining a bullish bias at the start of the week. Despite a modest pullback on Monday, the pair remains supported above the 0.8660 level, indicating underlying strength.
The Euro has drawn support from European Central Bank President Christine Lagarde's optimistic outlook shared during the Jackson Hole Symposium. Lagarde emphasized the resilience of the Eurozone labor market, reinforcing confidence in the region's economic stability despite broader uncertainties.
Additionally, Monday’s German IFO Business Climate data surprised to the upside, reflecting a slight improvement in business sentiment. However, the release had a limited immediate impact on the Euro’s performance.
Technical Analysis: Bullish momentum within established range
EUR/GBP is showing renewed upward momentum, having bounced off the 0.8600 support zone. Technical indicators support this move, with the Relative Strength Index (RSI) hovering near 60.00, indicating potential for continued gains.
A developing Gartley harmonic pattern suggests that bulls may target the August 5 support zone around 0.8680 and the 61.8% Fibonacci retracement of the early August decline at 0.8685. A further move higher could bring the pair to test the 78.6% Fibonacci level just above 0.8700, a common target during corrective rallies.
On the downside, initial support lies between 0.8640 and 0.8650—an area that held during the August 21–22 dip. A break below this zone could expose stronger support between 0.8595 and 0.8610. Should this level fail, bears may regain control, eyeing the July 1 low at 0.8555.
