EUR/GBP Technical Analysis: Bearish cross between 100- and 200-day SMA implies further downside

• EUR/GBP may see further downside as the 100- and 200-day SMAs bearish crossover seems imminent at the 0.8750 area.
• For the immediate short-term, indicators favour the Euro over the dollar.
• The 20-day SMA provides strong support on the downside.

On Monday, the EUR/GBP closed with slight gains near de 0.8580, just above the 20-day Simple Moving Average (SMA) area after bouncing from a daily low of 0.8540.

Upside potential for the EUR/GBP limited by bearish SMA cross

The Relative Strength Index (RSI) remains in negative territory but with a positive slope, indicating that bulls are gaining traction. The Moving Average Convergence Divergence (MACD) stands in positive territory, printing rising green bars, suggesting that the sellers are losing some steam. However, a bearish cross between the 100- and 200-day SMAs near the 0.8750 level could confirm the negative outlook for the short term and reignite selling momentum.

Levels to watch

The 20-day SMA at 0.8578 acts as a strong support which in case of being lost, the 0.8545 and the 0.8530 area would be exposed for a retest. On the upside, the 0.8600 psychological mark stands as the nearest resistance to retake before the 0.8635 and 0.8650 areas.