EUR/GBP has been trading in a consolidative manner since yesterday, staying fractionally above the upside support line drawn from the low of February 18th. Although the rate had been on a slide mode since March 19th, given the proximity to the aforementioned upside line, we would adopt a flat stance for now.
In order to start examining whether the bulls have taken charge, we would like to see a decisive break above the 0.8855 territory, which acted as a decent resistance on April 6th and 7th. Such a move would also place the rate above all three of our moving averages on the 4-hour chart and may thereby confirm a rebound from the pre-discussed upside line. The bulls may get encouraged to push the battle towards the peak of March 30th, at 0.8990, or the inside swing low of March 25th, near 0.9050. Another break, above 0.9050, may carry more bullish implications, perhaps paving the way towards the 0.9225 zone.
Taking a look at our short-term oscillators, we see that the RSI, although below its 50 line, rebounded from near 30 and points up. The MACD is negative, but above its trigger line, pointing up as well. Both indicators suggest that this exchange rate may start picking up positive momentum soon, which would be in line with the case of a rebound.
Now, in order to start examining the downside again, we would like to see a strong dip below 0.8625, a support defined by the low of March 5th. This will open the gates for a move towards the low of February 28th, at 0.8520, the break of which could extend the decline towards the 0.8410 territory, marked by the inside swing highs of February 20th and 24th.
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