• The Euro approaches 0.8800 after bouncing from the 0.8745 area on Friday
• The Pound's rally loses steam as the impact from the UK budget fades.
• EUR/USD bulls might find resistance at the 0.8795 previous support.

The Euro is showing strength against a softer British Pound on Monday and is trimming some losses after a nearly 0.8% decline over the previous two weeks. The pair has reached session highs above 0.8780 at the early European session, after bouncing at the 0.8745 area on Friday.

The pair extended losses last week, with the Pound boosted after a tax-rising UK budget eased investors’ concerns about the UK’s public finances. The Euro, however, drew some support from the steady German consumer inflation figures and maintains a firm tone on Monday, with all eyes on the Eurozone final Manufacturing PMI 

Technical Analysis: Bouncing up from the 0.8740 support area

The technical picture shows the pair coming under growing bullish pressure after finding support at the 61.8% Fibonacci retracement of the late October to early November rally at 0.8742. The 4-hour Relative Strength Index (RSI) has popped up above the 50 line, and the Moving Average Convergence Divergence (MACD) is trending higher above the signal line, which highlights the growing positive momentum

The pair may encounter resistance at the previous support level near 0.8795 (the lows of November 11, 17, and 20), ahead of a cluster of resistances between 0.8820 and 0.8830, where a reverse trendline intersects the lows of November 24 and 26, and then the November 14 high at 0.8865.

Support levels are at Friday’s low, of 0.8748 and the mentioned Fibonacci retracement of 0.8742, ahead of the area between October 27 low, at 0.8720, and the 78.6% Fibonacci retracement of the late October rally, at 0.8710.

(This story was corrected on December 1 at 09:36 GMT to say that EUR/GBP can meet final resistance at the November 14 high at 0.8865, not 0.8765.)