EURGBP bulls hit a wall near the 200-day simple moving average (SMA) which perfectly curbed last week’s aggressive rally, with the price edging down to the 0.8600 territory on Wednesday.
The price is currently ready to enter the 0.8647-0.8560 restrictive region formed by the 50% and 38% Fibonacci retracement levels of the 0.9018-0.8275 downleg, where a consolidation phase could take place given the downside reversal in the RSI and Stochastics from the overbought levels.
An extension below the bottom of this range could send the pair near its 20- and 50-day SMAs currently placed around the 0.8470 support region and the 23.6% Fibonacci. Lower, the 0.8392 barrier may attempt to deter any downfalls towards the 0.8300 base.
In case the 50% Fibonacci of 0.8647 pushes the price to the upside, the 200-day SMA which is flattening around the 61.8% Fibonacci of 0.8734 could come back into view. A decisive close above that obstacle could trigger a sharper increase towards 0.8850, while higher, the next stop could be near 0.8930.
Meanwhile in the medium-term picture, the outlook had turned slightly positive after the close above 0.8647, but the price is now preparing to resume its neutral profile below that threshold.
Summarizing, EURGBP is expected to face some pressure in the short-term, though a steeper downfall may only come below 0.8560. In the medium-term, a decisive close below 0.8647 would shift the picture from slightly positive to neutral.
