It is rising from the lower channel line and continues to make modest gains

• EUR/GBP bounced back after touching the lower line of its ascending channel.
• The chart suggests a slight uptrend as the price gradually steps higher.

EUR/GBP is retracing the lower channel line of its shallow rising channel and pushing higher.

The price continues to respect the boundaries of the recovery channel that started at the August 30 lows. It is slowly climbing higher, suggesting that a new short-term uptrend is taking root.

EUR/GBP 4-hour chart

The momentum indicator of the Moving Average Convergence Divergence (MACD) remains above the zero line, indicating a slight increase in price dynamics.

A close above the high of 0.8464 (9/11 high) would be needed to confirm an upward breakout of the channel. Such a move would likely reach around 0.8477, the 0.618 Fibonacci (Fib) extension if the channel height were extrapolated higher.

Bullish signs now marginally outweigh the bear. To begin with, EUR/GBP continues to rise in an ascending channel, secondly, it has now broken through the previous descending channel and finally the August exhaustion break (shaded orange circle) – when it accelerated downwards – it is a bullish reversal sign. .

The main bearish sign is the relative shallowness of the rising channel compared to the much steeper previous bearish move.

A close below 0.8423 (September 10 low) would pave the way for further weakness to a downside target at 0.8406, the lower 0.618 Fib extension.