• EUR/GBP extends the rebound from weekly low, 50-SMA.
• One-week-old resistance line, 23.6% Fibonacci retracement level limits immediate upside.
• Key SMAs, three-week-long ascending trend line appear important supports to watch during further downside.
• MACD, RSI conditions hint at the pair’s further declines.

EUR/GBP stays defensive while keeping the previous day’s bounce off a one-week low around 0.8600 during Wednesday’s initial Asian session.

The cross-currency pair dropped to the lowest levels since August 30 before taking a U-turn from the 50-SMA. The corrective pullback, however, lacks support from the MACD and RSI as it approaches the weekly resistance line near 0.8610.

With this, the EUR/GBP buyers need to wait for a clear upside break of 0.8610 to retake control.

Following that, the recent top surrounding 0.8675 and the yearly peak marked in June near 0.8720 will be in focus.

Alternatively, a downside break of the 50-SMA near 0.8585 could drag the EUR/GBP prices towards the 100-SMA level of 0.8515, before highlighting the 61.8% Fibonacci retracement of the August-September upside near the 0.8500 round figure.

It’s worth noting, however, that the quote’s weakness past 0.8500 will be tough as a convergence of the 200-SMA and an upward sloping trend line from mid-August will challenge the bears around 0.8470.

EUR/GBP: Four-hour chart

Trend: Further weakness expected