EURGBP has been carving out a descending triangle pattern on the daily time frame, with a series of lower highs connected by a falling resistance line pressing down on price while horizontal support around the 0.8621 level continues to hold as a floor.
The pair is currently trading around 0.8665 after bouncing off that support zone, hinting that another push toward the triangle resistance could be brewing.
If the pair manages to sustain the recovery, the descending triangle resistance line is the next hurdle to clear, currently sloping down toward the 0.8700 major psychological handle.
A clean break above that ceiling could put the March swing highs closer to the 0.8750 minor psychological area back on the radar. On the other hand, a decisive break below the 0.8621 support would confirm a bearish resolution to the triangle pattern, opening the door to a more significant leg lower.
The 100 SMA has crossed below the 200 SMA to suggest that the path of least resistance remains to the downside, with the gap between the two indicators reflecting sustained bearish pressure over the medium term.
Both moving averages are hovering just above the current price, which means they could act as dynamic resistance on any recovery attempts and make upside progress tricky.
Stochastic has shot up from the oversold zone and is already approaching overbought territory, reflecting a sharp return in buying interest off the lows. However, a turn lower from the upper boundary would suggest that bulls are running out of momentum before a meaningful breakout can materialize.
RSI has also climbed sharply from its lows and is nearing the overbought region, so there’s still a little room to run before sellers look to re-engage. If RSI rolls over around that zone, it could serve as an early warning that the bounce is losing steam and that the descending triangle resistance is likely to hold once again.
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