EURGBP appears poised for further losses and slipped beneath the 0.8850 barrier in the prior couple of days. Currently, in the short-term timeframe, the pair is developing between the 38.2% and the 50.0% Fibonacci retracement levels of the last significant upward movement with the low at 0.8690 and the high at 0.8923. The aforementioned levels are holding near the 0.8833 resistance level and the 0.8805 support level respectively.
In addition, the pair posted two positive days in a row following the rebound on the 0.8800 psychological level. In case of upward correction, the price could hit the 0.8850 obstacle and the 23.6% Fibonacci level at 0.8867. It is worth mentioning that the price needs to go through the 20 and 40 simple moving averages in the 4-hour chart, which are standing at 0.8847 and 0.8863 respectively.
On the flip side, the price could drop until the strong support area of 0.8790 – 0.8800. A break below could push the euro/pound lower towards the 61.8% Fibonacci mark near 0.8780.
During the previous sessions, the two SMAs (20 and 40) posted a bearish crossover, indicating a continuation of the sell-off. The RSI indicator is sloping to the upside in the negative territory, however, the stochastic oscillator recorded a bullish crossover within the %K line and the %D line, signaling for a pause of the downward movement.
Having a brief look at the daily timeframe, EURGBP has been trading within a downward sloping channel since October 2017, endorsing the scenario for a slight bearish behavior in the medium-term.
