EURGBP regained positive momentum above the 200-day simple moving average (SMA) on Wednesday that kept the bulls under control since the start of the month and is currently in battle with the 0.8800 area. Earlier, the pair confirmed a bullish double bottom pattern by breaking the neckline around 0.8594 and now the bullish cross competed between the 20- and the 50-day SMAs is further backing a trend improvement.
Regarding) the price momentum, it could stay positive in the short-term but some caution should be warranted as the RSI is bouncing back above its 70 overbought mark, meaning that any upside correction could be limited.
Nevertheless, a closing price above 0.8850 where the 78.6% Fibonacci of the 0.9018-0.8275 downleg is positioned, could extend the rally until the 0.8930 barrier and before the 0.9018-0.9087 restrictive area comes into view.
Alternatively, a downside reversal below the 200-day SMA which currently coincides with the 61.8% Fibonacci of 0.8734 would open the door for the 50% Fibonacci of 0.8647. Lower, a drop below the neckline and more importantly beneath the 38.2% Fibonacci of 0.8560 would eliminate optimism of an up-trending market, pushing support towards 0.8470.
Meanwhile in the medium-term picture, the outlook remains positive as long as the pair trades above 0.8647.
In brief, EURGBP is technically looking positive in the short- and medium-term timeframes, though as the pair is fluctuating in overbought waters, downside corrections or some stabilization cannot be ruled out.
