- EURGBP staged a goodish rebound from the 0.8865-60 support zone (61.8% Fibo. level).
- The technical set-up favours bearish traders and supports prospects for further weakness.
- The cross seems vulnerable to extend the bearish trend towards testing sub-0.8700 level.
- Fresh bearish positions should be accompanied by stop-loss near the 0.8920-25 region.
EURGBP defended the 0.8865-60 static support this Thursday and staged a goodish bounce from near three-month lows. The mentioned region coincides with the 61.8% Fibonacci level of the 0.8670-0.9175 positive move and should now act as a key pivotal point for short-term traders.
Meanwhile, technical indicators on the daily chart maintained their bearish bias and have recovered from the oversold territory on the 4-hourly chart. The set-up still favours bearish traders and supports prospects for an extension of the well-established bearish trend.
Hence, any subsequent recovery beyond the 0.8900 mark might still be seen as a selling opportunity and runs the risk of fizzling out rather quickly near the 0.8920-25 region, or 50% Fibo. level. That said, a sustained move beyond might prompt some near-term short-covering move.
Nevertheless, the cross seems vulnerable to slide further towards testing the 0.8800 handle. Some follow-through selling below the 0.8780-75 region will pave the way for additional weakness, possibly towards the 0.8700 round-figure en-route the 0.8670 strong horizontal support.