The EUR/GBP Pair Is Expected Limited Downside Movement
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- EUR/GBP fades bounce off immediate horizontal support, 200-HMA.
- Sluggish oscillators suggest limited downside room but bulls need validation from 0.8930.
- Monthly low lures bears past 200-HMA buyers have a bumpy road to the north to track.
EUR/GBP holds lower ground near 0.8880 during the early Monday morning in Europe.
In doing so, the cross-currency pair fades bounce off the 200-HMA and eight-day-old horizontal support. Also teasing the pair sellers is the lower high formation, marked since February 07.
However, the aforementioned support line, close to 0.8875 at the latest, precedes the 200-Hour Moving Average (HMA) level surrounding 0.8865, to put a floor under the EUR/GBP prices.
In a case where the EUR/GBP pair drops below 0.8865, the odds of witnessing a slump toward the monthly low near the 0.8800 round figure can’t be ruled out.
It’s worth noting, though, that January’s low near 0.8720 could challenge the pair sellers afterward.
Meanwhile, the 50% and 61.8% Fibonacci retracement levels of the EUR/GBP pair’s fall between February 03 and 14, near 0.8890 and 0.8910 in that order, could challenge the short-term upside of the pair.
Following that, a downward-sloping resistance line from February 07, close to 0.8930 by the press time, will be the key as a clear break of the same towards the north might endanger the monthly peak of 0.8978.
Overall, EUR/GBP is likely to grind lower amid mixed catalysts and sluggish prints of the MACD and RSI. Though, the downside room appears limited.
EUR/GBP: Hourly chart
Trend: Limited downside expected
