Bulls make a move and challenge the 20-day SMA

• Technical indicators suggest a shift in momentum into positive territory
• The RSI is rising near 50, indicating a return of buying pressure.
• MACD continues to print falling red bars.

In Wednesday’s session, EUR/GBP broke out and saw gains of 0.40% to rise near 0.8450. Although the bulls have taken a huge step, they still have more work to do to confirm a recovery.

The Relative Strength Index (RSI) has moved back towards the mid-50 point, signaling that buying pressure is recovering. This is supported by the flattening of the MACD (Moving Average Convergence Divergence) histogram, with the red bars falling and the histogram approaching the zero line. This suggests a potential shift in momentum into positive territory.

However, the overall outlook remains cautious as choppy and price action in recent candles suggest consolidation of the pair. While the pair held above the 0.8400 support level, the next resistance level to watch is 0.8460 at the 20-day simple moving average (SMA), and a break above could confirm a recovery.

EUR/GBP daily chart