• EUR/GBP extends previous week’s rebound from yearly low amid oversold RSI.
• Support-turned-resistance line, bearish MACD signals challenge pair buyers.
• 11-month-old horizontal support area appears a tough nut to crack for bears.

EUR/GBP picks up bids to stretch the previous week’s recovery from the lowest levels in 2023 heading into Monday’s European session. In doing so, the cross-currency pair justifies the oversold RSI (14) line to print the two-day rebound.

However, the previous support line from March 15, around 0.8640 by the press time, as well as the bearish MACD signals, challenge the EUR/GBP pair buyers.

Even if the quote crosses the 0.8640 hurdle, the 61.8% Fibonacci retracement of its August-September 2022 upside, near 0.8690, quickly followed by the 0.8700 round figure, can challenge the EUR/GBP bulls.

It’s worth noting that the 200-DMA level surrounding 0.8755 acts as the last defense of the EUR/GBP bears, a break of which could convince pair buyers to aim for the previous monthly high of 0.8834.

On the flip side, EUR/GBP sellers need validation from the 0.8600 round to return to the table.

Even so, a horizontal area comprising multiple levels marked since July 2022, close to 0.8550-40 by the press time, appears a tough nut to crack for the pair bears before approaching the late 2022 trough of around 0.8340.

Overall, EUR/GBP is likely to pare the latest monthly loss but the room towards the north appears limited.

EUR/GBP: Daily chart

Trend: Limited recovery expected