EURGBP has been easing off the post-Brexit high of 0.8627, a near 3-year high. Prices have been steadily declining since then and are now testing a key psychological level at 0.83. This is an important support level which saw some congestion around this area right after the big move up following the Brexit vote.

Upside momentum faded after the big rally and RSI reached overbought levels above 70. Consequently, the RSI indicator has turned back down, although still in bearish territory above 50.

If support at 0.83 fails to hold, this would accelerate a decline towards 0.8116, the April 7 high. This level is also the 50% Fibonacci retracement level of the upleg from 0.7600 to 0.8627 (June 24 – July 6 rally) and would be another key support level. A drop below this would shift the bias to bearish.

Alternatively, if prices bounce back up from 0.83, there is scope to target last week’s high of 0.8627 and then the bullish trend would continue above this peak.

The overall outlook remains bullish as the 50-day moving average has crossed above the 200-day moving average, giving a bullish signal.