EURGBP stretched Friday’s aggressive rally to a new 1 ½-month high of 0.8957, and although some weakness in the price is visible at the moment, optimism for additional gains remains as the bulls have previously successfully breached the 50-day simple moving average (SMA) while the RSI and the MACD continue to trend up in the bullish area.
The 38.2% Fibonacci retracement level of 0.8986 of the latest downfall is now the nearest resistance to block upside movements. Breaking that wall, the following Fibo levels of 0.9083 and 0.9180 could next take over, deterring any improvement towards the 0.9323 hurdle.
Should the market erase Friday’s gains, falling back below the 50-day SMA and the 23.6% Fibo of 0.8874, the 20-day SMA at 0.8770 may provide some footing ahead of the 0.8670 low, where the 200-day MA is pointing. The bears could keep the upper hand if the latter fails to curb downside corrections, simultaneously eliminating hopes of an upward-trending market, especially if the 0.8600 is breached as well.
Summarizing, EURGBP is expected to hold a bullish bias in the short-term, with the 0.8986 level likely adding some pressure on the upside.
