EUR/GBP Price Analysis: A mean reversion to near 10-EMA looks likely

The EUR/GBP pair has turned sideways after a minor corrective move from 0.8980 in the Asian session. The cross is displaying a subdued performance after a five-day winning streak as long liquidation by the market participants has been triggered.

On Monday, the cross will dance to the tunes of Eurozone Retail Sales data. The economic data is expected to contract by 2.7% from a prior contraction of 2.8% on an annual basis. The monthly data is seen contracting by 2.5% against an expansion of 0.8% reported earlier. Households demand has been declining for a few months and a further decline will trim inflation projections, and eventually will delight the European Central Bank (ECB).

EUR/GBP is demonstrating a loss in the upside momentum after delivering a breakout of the symmetrical triangle chart pattern on the daily scale that indicates a sheer decline in volatility, which results in wider ticks and heavy volume after a breakout. Horizontal support is plotted from January 12 high at 0.8867.

Upward sloping 50-and 200-period Exponential Moving Averages (EMAs) at 0.8794 and 0.8662 respectively, add to the upside filters.

The Relative Strength Index (RSI) (14) has shifted into the bullish range of 60.00-80.00, which indicates that the upside momentum is active.

After a sheer upside move, a mean-reversion to near the 10-period Exponential Moving Average (EMA) at 0.8868, at the press time, will be a bargain buy for the market participants for an upside to February 2 high at 0.8950 followed by the psychological resistance at 0.9000.

Alternatively, a breakdown of January 27 low at 0.8765 will drag the asset toward January 19 low at 0.8722. A slippage below the latter will drag the cross toward October 4 low at 0.8649.

EUR/GBP daily chart