The EURGBP pair has rebounded after dropping to near 0.8744 in the early Tokyo session. The mild correction in the cross seems over as the Pound bulls have retreated. The asset is expected to recapture the weekly high at 0.8788 as investors are shifting their focus towards fiscal policy measures from the UK government to curtail the debt crisis.

EURGBP bulls gained traction on Friday after confirmation above the 50-day SMA, at 0.8700, now acting as support to attempt an assault to the October 21 high at 0.8780.

Above here, the pair would have canceled the downward trend from late September highs, opening the path towards 0.8965 (Oct. 12 high) and 0.9000 psychological level.

On the downside, immediate support lies at the mentioned 50-day SMA, at 0.8700 with the next targets below there at 0.8650 (Oct 27 high) and 0.8570 (October 28 and 31 lows).

the quote’s recent weakness could be portrayed by a pullback from the 200-SMA. However, a successful break of the three-week-old bearish triangle, crossed on Thursday, keeps the pair buyers hopeful unless the quote drops back below 0.8660.

Also favoring the EURGBP sellers could be the bullish MACD signals and the strong RSI (14), not overbought.

Even if the quote breaks 0.8660 resistance-turned-support, the downside could have a limited shelf life lower line of the stated triangle, around 0.8570, which could challenge the pair bears.

It should be noted that September’s low near 0.8566 acts as the last defense of the EURGBP buyers.

Alternatively, recovery moves need to cross the 200-SMA hurdle of 0.8740 to recall the EURGBP bulls.

Even so, the previous monthly top near 0.8865 appears a tough nut to crack for buyers.

Following that, a run-up towards the 0.9000 psychological magnet can’t be ruled out.

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