EURGBP rebounded yesterday after triggering some buy orders near the 0.8545 zone, marked as support by the low of December 1. That said, the pair remains below the upward sloping line drawn from the low of March 7, which implies that yesterday’s recovery may be just a corrective bounce within the broader downtrend.

Both the RSI and the MACD reflect the rebound and suggest that it could extend for a while longer, perhaps until the pair tests the aforementioned uptrend line. The RSI rebounded from slightly below its 30 line, while the MACD, although negative, poked its nose above its trigger line.

 If the bears are willing to recharge from below the uptrend line, they may attack the 0.8545 barrier again. Nonetheless, a break below that zone may be needed to signal a downtrend continuation. Such a dip could set the stage for declines all the way down to the low of August 24 at around 0.8405.

On the upside, a break above 0.8650 could dismiss the bearish case and perhaps turn the outlook neutral, but the move signaling that the bulls have stolen all the bears’ swords may be a strong break above the 0.8865 territory, which acted as a ceiling on several occasions in the recent past. If at some point in the not-too-distant future, the bulls are strong enough to achieve such a recovery, they may then feel confident to climb to the peak of February 3 at 0.8980.

To recap, EURGBP posted some gains yesterday, but in the bigger picture, the outlook likely remains negative as the pair continues to trade below the uptrend line drawn from the low of March 7.