The EUR/GBP pair is showing signs of a two-day recovery losing momentum as it struggles to break above the thin daily cloud. Daily candles with long upper shadows indicate ongoing pressure in the market.
From a technical standpoint, the daily chart shows a bearish alignment with moving averages in a bearish setup and the 14-day momentum turning south towards the centerline. Another failed attempt to clear the cloud top, combined with the 55-day moving average, could signal a stall in the recovery and increase the risk of fresh weakness towards the April 30 low of 0.8530 and the April 14 low of 0.8520.
For a shift in the near-term focus to the upside, the pair would need to accelerate and close above the 0.8560/75 zone. This area holds a cluster of daily moving averages (10/20/100) and the Fibonacci 38.2% retracement level of the bearish leg from 0.8644 to 0.8530.
Key resistance levels to watch for are at 0.8560, 0.8575, 0.8587, and 0.8605, while support levels are at 0.8545, 0.8530, 0.8520, and 0.8503.
Overall, the EUR/GBP pair is facing resistance at the current levels with signs of a potential bearish continuation, unless it manages to break above key resistance levels for a shift in momentum.