EURGBP has adopted a softer negative trajectory since January 5, something also being reflected in the calmed slope of the 50-period simple moving average (SMA). Nonetheless, the longer-term SMAs continue to defend the bearish trend in the pair.
The short-term oscillators are indicating a minor increase in positive momentum, which could prolong the consolidation in the pair from the beginning of the year. The MACD, not too far beneath the zero threshold, has overstepped the red trigger line, while the RSI is hovering a tad below the 50 level, making attempts to creep higher. Furthermore, the positively charged stochastic oscillator is promoting more positive price action.
In addition, the Bollinger bands remain relatively squeezed and are hinting that a surge in volatility is expected, which suggests a larger directional move may unfold.
Attempts in the pair to improve could encounter prompt upside constraints at the mid-Bollinger band and adjoining 50-period SMA around 0.8343. If buyers push higher, resistance may then arise at the 100-period SMA at 0.8359 before the bulls face the 0.8367-0.8378 ceiling of the two-week sideways market. Successfully conquering this, bullish impetus could meet the 0.8394 high, just shy of the 0.8500 mark, prior to buyers challenging a resistance border between the 0.8416 barrier and the 200-period SMA at 0.8431.
If negative pressures gain strength again, initial deterrence to the pair running lower is the 0.8312-0.8322 recently formed base. In the event the fresh near 2-year low of 0.8312 is broken, traders’ focus could then shift toward the critical 0.8276-0.8281 support section. This key barrier is linked to a double bottom formation involving the sell-off troughs from December 2019 and February 2020, from where an ascent in the pair began, which recorded an 11-year high of 0.9497. Sinking past this, the bears could target the 0.8248 trough, identified in mid-July 2016.
Summarizing, EURGBP is sustaining a neutral-to-bearish tone. That said, a break below the 0.8312-0.8322 floor or above the 0.8367-0.8378 ceiling of the minor consolidation would need to occur to establish a clearer short-term direction.
