EURGBP has been trading in a quiet mode since Friday, hovering slightly above the 0.8545/70 zone, which has been providing strong support since September. That area is also acting as the lower bound of a sideways range the pair has been trading in since early October, with the upper bound being at 0.8825. This, combined with the fact that all three of the plotted moving averages point sideways, paints a neutral picture for now.
Adding to the trendless narrative are both the RSI and the MACD. The former is lying near its equilibrium 50 barrier, while the latter is running near both its zero and trigger lines, pointing sideways.
Given that in the bigger picture the pair is trading above an uptrend line taken from the low of March 7, the chances of a rebound – even within the aforementioned range – may be larger than the chances of a drop lower. A break above the crossroads of the 0.8645 barrier and the 200-period exponential moving average (EMA) may confirm the notion and allow advances towards 0.8705 or 0.8775, marked by the highs of November 23 and 17 respectively.
Should the bears reclaim control and take the pair below the longer-term uptrend line, a break below 0.8405 may be needed to signal that the outlook has notably darkened. Such a dip could initially pave the way towards the low of August 2 at 0.8340, the break of which could carry extensions towards the 0.8260 territory, near the low of April 14.
Putting everything together, EURGBP has been trading in a sideways manner since October, but in the bigger picture it holds above an uptrend line taken from back in March. Thus, this adds to the chances of a rebound soon, even within the short-term range.
