EURGBP traded higher yesterday, after hitting support at the crossroads of the 0.8385 level and the tentative upward line drawn from the low of the March 7 low. However, the advance remained limited near the conversion point of all planned exponential moving averages (EMAs) , slightly below the lower line drawn from the June 15 high.
This likely keeps the near-term outlook neutral, a view also enhanced by the daily oscillators. The RSI bounced back a bit, but it has now flattened near its 50 line, signaling a lack of directional momentum. The MACD, although negative, remains above its trigger line and is moving closer to zero, suggesting that the bearish momentum is now fading.
The bears can regain full control on a dip below 0.8385, which could also confirm the break of the upper support line taken from the low of March 7. The next area to consider as support can be at 0.8340, a zone that hindered the bears. from drifting further south earlier this month. However, if that hurdle is cleared this time, a dive to the April 14 low at 0.8250 may be possible.
Alternatively, the move that could encourage more bulls to jump into action may be a recovery above the August 12 high, around 0.8495. This would confirm a next higher high on the daily chart and could set the stage for advances to the July 21 peak, at 0.8583. Another break above 0.8583 could extend the advance to the July 1 high, near 0.8675.
In short, EURGBP is stuck between two diagonal lines, and although the planned moving averages provide resistance, our oscillators detect a lack of or little directional momentum. This probably paints a neutral near-term picture for now.