EURGBP is seeking shelter around the 0.8800 round-level and near eight-month lows after breaching the tough lower boundary of its seven-month-old range.
Although the RSI and the MACD remain comfortably below their neutral levels, discouraging a meaningful rally, they cannot exclude the case of a rebound as the RSI seems to have found a bottom just above its 30 oversold level and the MACD is stabilizing around its red signal line.
On the upside, however, there are several obstacles which could cancel any upside correction. The key 0.8865 former support level and the 50% Fibonacci retracement of February’s rally at 0.8889 could come first into view, while higher the 50- and 200-day exponential moving averages (EMAs) may also attempt to block any improvement towards the 38.2% Fibonacci of 0.9033. Not far above, the 0.9088 resistance could be the next target if bullish pressure persists.
If the pair extends its downward slide, the 61.8% Fibonacci of 0.8745 may provide some footing ahead of the April trough of 0.8670. Below the latter, the 0.8600 mark could be another spot to watch.
In the bigger picture, the pair continues to fluctuate within the wide range of 0.8281 – 0.9497, keeping its broad outlook neutral. The bearish intersections between the EMAs, however, suggest that the latest down leg may see further extension within these borders.
Summarizing, EURGBP could ease its negative momentum in the short run, with the 0.8865 – 0.8889 region expected to act as immediate resistance. Otherwise, traders may look for support around 0.8745.
