• EURGBP edges lower today, a tad above 0.8720

• It continues to respect the August 23, 2023 trendline

• Momentum indicators remain mostly bullish

EURGBP is trading a tad above 0.8720 and registering its first red candle after five consecutive green candles. It bounced off the August 23, 2023 ascending trendline last week with the bulls aiming to record a new high, keeping the bullish structure of higher highs and higher lows alive and recouping another part of the losses they incurred since the February 3, 2023 high.

In the meantime, the momentum indicators are starting to exhibit some rally-exhaustion signs. The Average Directional Movement Index (ADX) is comfortably above its 25-threshold, signaling a decent bullish trend in the market, but failing to make a higher high. Similarly, the RSI is tentatively hovering above its 50-midpoint. More importantly, the stochastic oscillator has broken above its moving average and appears to be heading towards its overbought territory, revealing bullish pressure in the EURGBP pair.

Should the bulls feel ready for another upleg, they could first try to keep EURGBP above the 0.8720 level. They could then stage a rally towards the 0.8794-0.8815 region that is populated by the 50% Fibonacci retracement of the August 4, 2022 – September 26, 2022 uptrend and the February 25, 2013 high. Even higher, they could have the chance of testing the resistance at the 0.8902-0.8941 range.

On the flip side, the bears are keen on pushing EURGBP below the busy 0.8664-0.8720 area. This is defined by the 61.8% Fibonacci retracement, the June 15, 2022 high, the 50- and 200-day simple moving averages (SMAs), as well as the August 23 upward sloping trendline. If successful, they could then have a go at the 0.8622-0.8647 range.

To sum up, EURGBP bulls are trying to keep the current upleg intact, but this is probably becoming trickier as the momentum indicators are gradually turning less bullish.