• EUR/GBP extends Friday’s bounce off 0.8583, picks up bids of late.
• Normal RSI conditions, bullish chart pattern favor buyers.
• Key Fibonacci retracement levels add to downside filters.

EUR/GBP reverses pullback from intraday top of 0.8616 while picking up bids to 0.8611, up 0.05% on a day, during early Monday.

The cross-currency pair remains inside a two-week-old rising channel formation amid normal RSI conditions, which in turn suggests an extension of Friday’s recovery moves toward the last week’s top surrounding 0.8645.

However, the upper line of the stated channel and 200-SMA will test the EUR/GBP bulls near 0.8650, a break of which will have multiple hurdles around 0.8675 and the 0.8700 threshold before challenging the previous month’s top of 0.8719.

On the contrary, sellers may not risk entries unless the prices remain beyond the channel support, around 0.8590.

Also acting as the key short-term downside filter is the 61.8% Fibonacci retracement level of April’s upside, near 0.8565.

Overall, EUR/GBP justifies the May 12 bounce off 61.8% Fibonacci retracement with a bullish chart pattern.

EUR/GBP FOUR-HOUR CHART