EURGBP’s Clear Direction Curbed as Recent Gains Fade

Technical analysis of Forex market

EURGBP is receding beneath the 50-day simple moving average (SMA) at 0.9012, residing between the converging 100- and 200-day SMAs. The conflicting SMAs seem to be developing a somewhat sideways bearing, promoting the near-term directionless market.

The opposing short-term oscillators echo confusion in directional momentum. The negatively charged stochastic oscillator and the dipping RSI, barely above the 50 mark, are favouring moves to the downside. Yet, the MACD, which is holding above the zero line and its red trigger, is endorsing slight strength in positive momentum.

If buyers resurface and steer the price above the 50-day SMA at 0.9012, abrupt resistance may originate from the 100-day SMA currently at the 0.9034 level, which also happens to be the 38.2% Fibonacci retracement of the up leg from 0.8281 until 0.9498. Propelling above this, the bulls may meet the upper Bollinger band at 0.9084 ahead of the resistance section of 0.9139-0.9160. Conquering this ceiling, the pair may then target the 23.6% Fibo of 0.9211.

To the downside, early support may arise from the 200-day SMA at 0.8984 and the adjacent mid-Bollinger band underneath. Sinking past these durable borders, the pair could hit the 0.8927 low. Next, sellers may then challenge the hardened foundation from the 50.0% Fibo of 0.8890 until the 0.8860 boundary, containing multiple troughs extending back nearly six months as well as the lower Bollinger band.

Concluding, in the short-to-medium-term timeframe, EURGBP is sustaining a neutral bias between 0.8860 and 0.9291. It appears the pair may continue to edge sideways around the 0.9000 handle.