EURGBP has staged a strong rally from the November 2015 lows of 0.6981 to rise in an ascending channel to reach a high of 0.8116 last week on April 7. Prices have since reversed lower after failing to close above a key level at 0.8091.
This is the 61.8% Fibonacci retracement level of the downleg from 0.8813 to 0.6935 (February 2013 to July 2015 decline). This has acted as a strong resistance level that was tested a few times until prices lost momentum and fell to 0.7960 on Tuesday and are currently consolidating around this level. Prices would have to rise back above 0.8000 to maintain the bullish trend.
The market turned lower after reaching overbought conditions as indicated by RSI which breached the 70 level. The next target to the downside is the 50% Fibonacci at 0.7872. A break below this would shift the bullish bias that was in place since November 2015. A fall below the 23.6% Fibo level at 0.7378 would bring the pair into a neutral bias as long as prices remain above 0.6935.
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