EURGBP trades weak on policy divergence between the BOE and the ECB. Intraday bias remains bearish as long as the resistance at 0.8720 holds. It hits an intraday low of 0.86572 and is currently trading around 0.86580.
The Bank of England (BOE) and European Central Bank (ECB) are following separate monetary policies as of September 2025 because of different economic problems: Supported by near-target inflation and 200 basis points of decreases since June 2024, the ECB is halting its rate-cutting cycle at a 2.00% deposit rate. Stable Eurozone growth is expected; meanwhile, the BOE, after reducing rates to 4.00% in August, should remain steady on September 18 amid consistent 3.7% inflation. and a half, 0.75% growth projection. Driven by the ECB's neutral policy approach and the BOE's conservative approach to stagflation risks, this divergence is affecting markets; Eurozone bond yields fell. to 3.0% and European financials overperforming; the BOE's uncertainty postpones more rate reduction estimates.
Technical Analysis
The pair is currently trading below 55 and above 200- EMA and 365-EMA on the 4-hour chart.
Bearish Trend Confirmation: Any break below 0.86450 confirms an intraday bearish trend. A drop to 0.8600/0.8560/0.8520/0.8480 is likely.
Near-Term Resistance: The near-term resistance is around 0.8700. Any violation above will take the pair to 0.8725/0.8750/0.8800/0.8850.
Indicator Analysis (4-hour chart)
CCI (50): Bearish
Average Directional Movement Index: Bearish
Trading Recommendation
It is good to sell on rallies around 0.8678-80 with SL around 0.8725 for a TP of 0.8520.
