Forex Technical Update
The EUR/GBP is consolidating above 0.8370. The 1H chart shows the market anchored into a channel with a subtle upside bias. However, the RSI has not been able to sustain a break above 60, suggesting maintenance of the bearish momentum. Still the RSI has been held above 40 as well, reflecting a sideways market. The 1H chart shows the market now trading near the channel support, which would be just above 0.8385.
A break below 0.8385 does not necessarily mean bearish continuation, as the true consolidation low is at about 0.8372. Below 0.8370 we are likely to continue the bearish scenario. On the other hand, when you look at the 4H chart, we are trading near the bottom bollinger band (3 standard deviations from the 200SMA). This suggests an oversold market especially if the RSI reading is also at 30.
The February low is 0.8350, and the 2011 low is 0.8280. These are the next support pivots below the current consolidation low. Above 0.8425 consolidation high, we could be looking at a retest of 0.85 area as resistance after an immediate resistance at the 0.8445-0.8450 area.