EURGBP has been neutral since mid-January and pivoting around the 50-day moving average and trading between 0.8455 and 0.8650. In the past week, the pair has been capped at the 50-day moving average, which is providing resistance at 0.8540. This is giving a bearish bias in the near-term, as long as the market remains below this resistance level. RSI is below 50, indicating further downside in EURGBP is possible. MACD is below zero, also giving a bearish signal. Given this, a deeper fall in the market cannot be ruled out yet.
Support comes in at 0.8455, which is defined by the 200-day moving average and this week’s low. A break below this support level would shift the bias to the downside to target 0.8304 (December 2016 low).
Alternatively, if prices manage to clear the 50-day moving average resistance area, then there is scope to target 0.8650, which is an important resistance level that has been approached a few times in the past. Only a break above this level would shift the medium-term outlook from neutral to a more bullish one and target important resistance levels at 0.8765 and 0.8851.