EURGBP traded lower yesterday, after it hit resistance slightly below the 0.8780 zone. Today, the rate is flirting with the 0.8655 barrier, but a break lower may be needed before the bears claim full control of the pair. Most of the price action has been contained between that barrier and 0.8780 since the beginning of the month, which suggests a neutral short-term picture.
The RSI is lying below 50 and the MACD is running below both its zero and trigger lines, both pointing to negative momentum. However, looking at the plotted exponential moving averages, they all point sideways, enhancing the neutral outlook for now.
A decisive dip below 0.8655 could allow declines towards the 0.8600 or 0.8565 zones, the break of which could carry larger bearish implications. The next stop may be at 0.8500, and if the bears are not willing to stop there either, the slide may extend toward the 0.8400 area, which acted as a floor during the whole month of August.
On the upside, a break above 0.8700 could add brightness to the picture and may encourage advances towards the peak of October 12 at 0.8865. If that zone is breached as well, the pair may add to gains and aim for the 0.8980 territory, defined as a resistance by the high of September 29.
To sum up, EURGBP slid yesterday, extending its fall today, but stayed within the sideways range that’s been containing most of the price action since the beginning of the month. For the slide to extend, a break below 0.8655 is needed.