Correction higher stalls with risk of further downside ever present

• EUR/GBP pauses after temporarily bottoming and correcting higher. 
• RSI momentum has exited oversold indicating a possible reversal higher, although the trend remains bearish overall. 

EUR/GBP pauses after correcting back from the bottom the pair made on September 24. 

Despite the pullback over recent days, the pair remains in a short and medium-term downtrend and given it is a principle of technical analysis that “the trend is your friend” the odds continue to favor bears. 

EUR/GBP Daily Chart 

More broadly, EUR/GBP has now reached the first downside target for the move that began at the August 5 high suggesting an easing in bearish pressure. The target is the 61.8% extrapolation of the initial move down during August before the shallow channel higher that formed in early September. It is even possible this could indicate the end point of its decline, although that is not confirmed.

A break below the 0.8317 September 24 low, however, would reconfirm an extension of the downtrend towards the next target at 0.8287, the August 2022 low. 

The Relative Strength Index (RSI) has exited oversold after the September 24 bounce and this could indicate the risk that a stronger correction may as yet unfold higher. Such a move would be confirmed by a break above 0.8372, the September 25 high.