EUR/GBP has been trading in a falling channel since making a high on the month in November at 0.8038. At the end of the 12/9 (Tuesday) session, the pair has rallied to 0.7930, and is testing the falling channel resistance along with the 100-period SMA in the 4H chart, and a resistance pivot from last week around 0.7920. (EUR/GBP 4H Chart 12/10; click to enlarge)We can also see the the RSI is testing 60. In a market that maintains the bearish bias and momentum, EUR/GBP should hold below 0.7930, and the RSI should hold below 60. So far, we are seeing some resistance. Let's first examine the bearish continuation scenario. December's price action has been sideways, so we can call the current mode in the 4H chart neutral-bearish, incorporating the prevailing downtrend from November's high. So, the bearish outlook in the short-term is first limited to the 0.7840-0.7850 area, December's lows. The mode in the daily chart is also neutral-bearish, so for now, the short to medium. So, a break below 0.7840 can then open up the 0.78, November low, and the 0.7766, September and 2014-low with risk of breaking lower. Let's say price breaks above 0.7930. This would keep the EUR/GBP away from the bearish continuation scenario, and keep it in a sideways scenario, which has upside risk towards the 0.8045-0.8065 resistance area seen in the daily chart. This outlook strengthens if price pulls back and holds above 0.79. (EUR/GBP Daily Chart 12/10; click to enlarge)