EURGBP staged a mighty rally over the past weeks, crossing above its 50- and 200-day simple moving averages (SMAs) to touch the 0.8840 zone, before retreating somewhat. The near-term outlook seems to have turned positive, though a clear break above 0.8840 is needed to confirm that.
Short-term momentum indicators, on the other hand, suggest a pullback may be looming. The RSI turned lower after entering its overbought zone, while the MACD seems to be topping above its trigger line.
A potential pullback could stall initially near the 200-day SMA, currently at 0.8781. A bearish break may open the door for a test of the 0.8680 area, where another violation would turn the outlook back to neutral.
On the flipside, if the bulls stay in control, the next obstacle is 0.8840. If buyers pierce above it, that would reaffirm the positive picture, paving the way for a test of 0.8925.
In short, a decisive move above 0.8840 would turn the picture to firmly positive, whereas a break back below 0.8680 would turn it neutral, from cautiously positive now.