EURGBP Could Provide The Bulls A Second Chance

Technical analysis of Forex market

EURGBP pulled back below the 0.9290 resistance for the second time this year but the bulls may have a second chance to retake control as the pair is exposed to a key supportive area.

The 50% Fibonacci retracement of the 0.9497-0.8670 downleg is currently in action at 0.9080, blocking any additional negative correction. If it proves fragile, the descending trendline with the help of the 38.2% Fibonacci of 0.8980 could still keep the bulls on the surface if they manage to put a floor there.

Note that the RSI and the MACD are sloping downwards but have yet to cross below their neutral levels. Meanwhile, the 20-day simple moving average (SMA) is trying to return above the 50-day SMA, also suggesting that the bulls have not been drowned out yet.

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Should the pair bounce up, the 61.8% Fibonacci of 0.9181 may add some pressure ahead of the 0.9290 hurdle. A close higher could generate additional gains probably up to the 0.9415 barrier, where any violation will bring the 0.9497 peak back under the spotlight.

In the event the price dives below 0.8980, the selling pressure may persist until the 23.6% Fibonacci of 0.8864, while slightly lower, the 200-day SMA could be another key obstacle to keep in mind.

Summarizing, EURGBP is facing a weakening positive bias. A drop below 0.8980 could switch the sentiment to bearish.