Finding support just above the 0.8550 figure, the EURGBP currency is making its way higher as it tests current resistance at 0.8600.  The psychological barrier serves as a key technical level in the short term 15-minute time frame as a penetration above could lead to further gains in the exchange rate.

Technical indicators are supportive of this notion as both Relative Strength Index and Stochastic are turning higher after oversold indications.  Reinforcing the technical signal is a MACD bullish convergence.  As the price bounces off of support at the 0.8550, the histogram convergence only confirms the fact that a short term reversal is imminent – sparking a potentially longer term move higher in the exchange rate.

EURGBP 15-minute timeframe – Source:  FXTrek Intellicharts

So, given the bullish technical indications, we are likely to see a further move higher in the currency pair in the short term.  But, this remains widely contingent on a break above the 0.8600 barrier.  Once the exchange rate closes above this level in the 15-minute timeframe, we could anticipate an initial test of resistance at 0.8625.  This is before a medium term target at 0.8654 or the 38.2% Fibonacci retracement level from 0.8821-0.8549 can be touched.

As always, there is a comparable scenario that needs to be taken into account.  Should the currency pair remain unable to penetrate above the 0.8600, we anticipate a full retracement and retest of the 0.8550 support in no time.