EURGBP is looking more neutral in the short term after pulling back from multi-week highs reached on Friday. The rebound from 0.8620 (11-month low) to 0.8841 (7-week high) lost momentum after hitting resistance at the 61.8% Fibonacci retracement of the downleg from 0.8967 to 0.8620.
Momentum indicators point to further downside risks in the near term. The RSI has slid to just above the 50-neutral level, while the stochastics are pointing downwards and approaching negative territory.
Immediate support is being provided by the 50-day moving average (MA) around 0.8775. A daily close below the 50-day MA would shift the near-term bias to bearish and clear the way towards the 38.2% Fibonacci retracement at 0.8750. Further losses would bring prices within reach of the key psychological 0.87 level (the 23.6% Fibonacci).
However, if the pair manages to regain positive momentum, the 61.8% Fibonacci level around 0.8835 would once again come into focus. Prices would need to successfully challenge this barrier in order to turn attention back to the upside and resume the three-week old rally. Resistance above this mark would likely come from the 200-day moving average around 0.8875, followed by the 78.6% Fibonacci around 0.8890.
In the medium term, EURGBP remains within a slightly downward tilting channel that has been developing since late September 2017.
