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EUR/GBP Tags Multi-Month Highs

EUR/GBP bounced from a low on the year at 0.7766 at the end of September and broke above 0.80 this week. This is a relatively strong bullish correction since the pair started falling in March from the 2014-high at about 0.84. 

EUR/GBP Daily Chart 10/16(click to enlarge)

Strong Bullish Correction:
Note that price has broken above the 100-, and 50-day simple moving averages as well as a falling trendline from 0.84. The RSI has also broken above 60 to show loss of bearish momentum. 

While price action has been bullish in October, it is now pushing against a key resistance area between 0.8033 and 0.865. This is the resistance area from June to early September. We are already seeing a some selling in this resistance are.

Bullish outlook:
Now, if price falls let's monitor the 0.7875 to 0.7890 area. Ability to hold above this area, and return above 0.79 should keep the bullish correction scenario alive. The bullish outlook has the 0.81, 200-day SMA, then the 0.8157 support/pivot area in sight.

A break below 0.7874 might continue to pressure the 0.7760-70 area.