EURGBP continues to trend higher after breaking past a major range resistance visible on its longer-term charts.

On the 1-hour time frame, it can be seen that the pair is moving inside an ascending channel formation and is testing support. 

The 100 SMA is above the longer-term 200 SMA on this time frame so the path of least resistance is to the upside. In other words, support at .8800 is more likely to hold than to break, sending price back up to the .8900 area. Stochastic is also pulling up from the oversold area to signal a return in bullish pressure. 

Earlier in the week, ECB head Draghi hinted that they could withdraw stimulus soon, sending the euro on a strong rally. However, these gains were quickly erased when policymakers signaled that the Governor’s remarks may have been misinterpreted.

As for the pound, BOE head Carney’s remarks also sounded more upbeat than usual as he mentioned that a global boom would make a rate hike necessary. The vote on the Queen’s Speech could likely drive pound price action from here but this relatively hawkish statement could keep the currency afloat. 

By Kate Curtis from Trader’s Way