The neutral bias that the EURGBP pair held recently has now shifted to a more bearish one after prices broke out of a one-month range of 0.8880 and 0.9050.
Prices fell sharply on Wednesday, with key 0.8880 support giving way. This lead to an acceleration in the decline and EURGBP has fallen for a third consecutive day today. RSI is below 50 in bearish territory and is still trending lower. This indicates the probability of a further decline in prices.
However, as the daily RSI approaches near oversold levels, there could be some consolidation in the market. The 200-day moving average is in sight and will likely act as support around 0.8620.
Next support lies at 0.8531. This is the 78.6 Fibonacci retracement level of the rise from 0.8332 to 0.9261. A break below this would target the September low of 0.8332.
The market would have to rise above 0.9050 to bring back the bullish move that occurred from 0.8332 to 0.9261. (September to October) For now the bearish bias remains in the short term.
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