EUR/GBP Price Analysis: Fades bounce off 200-HMA ahead of EU/UK PMIs

• EUR/GBP remains sidelined after rising the most in two weeks the previous day.
• Failures to cross 50% Fibonacci retracement, sluggish oscillators keep sellers hopeful.
• Weekly support line appears a tough nut to crack for the bears.
• Preliminary readings of S&P Global PMIs for May, ECB’s Lagarde eyed for fresh impulse.

EUR/GBP takes rounds to 0.8500 following the run-up to refresh a one-week high, recently easing to 0.8490 heading into Tuesday’s European session.

In doing so, the cross-currency pair pares the biggest daily jump in 13 days while fading the bounce off the 200-HMA.

It’s worth noting that the preliminary readings of the UK and Eurozone S&P Global Manufacturing and Services PMIs for May, as well as a speech from ECB President Christine Lagarde, become crucial for the EUR/GBP traders to watch.

Given the bearish MACD signals and descending RSI (14) line, not oversold, EUR/GBP prices are likely to remain pressured.

However, a clear downside break of the 200-HMA level near 0.8485 becomes necessary for the pair sellers to retake control.

Even so, an upward sloping trend line from May 17, close to 0.8445, could test the quote’s further declines before highlighting the 0.8400 round figure.

Alternatively, 50% Fibonacci retracement (Fibo.) of May 12-17 downside, at 0.8505, guards the EUR/GBP pair’s recovery moves.

Following that, the 61.8% Fibo. near 0.8535 and the 0.8600 threshold may test the pair buyers before directing them to the monthly high, also the highest since late September 2021, close to 0.8620.

EUR/GBP: Hourly chart

Trend: Further weakness expected