EUR/GBP Technical Update: Sharp Recovery Post-UK CPI Data, Bearish Bias Persists Below 0.8435

EURGBP  recovered sharply after weak UK CPI data. Intraday bias remains bearish as long as resistance 0.84350 holds. It hit a high of 0.83802  at the time of writing and is currently trading around 0.83638.

The UK Consumer Price Index (CPI) for September has decreased to 1.7% year-on-year, falling short of the expected 1.9%. Additionally, Core CPI declined to 3.2% year-on-year, down from the previous month’s 3.6% and below the anticipated 3.4%. This dip in CPI is below the Bank of England's (BoE) target of 2%, raising the likelihood of a rate cut at the upcoming BoE meeting. Following the disappointing UK CPI data, the probability of a rate cut has surged to 80%, which is viewed negatively for the Pound Sterling.

Technicals-

The pair is trading above  34- and above 55 EMA in the 4- hour chart.

Any sustained break below 0.83200 confirms a bearish continuation. A dip to 0.8300/0.8280/0.8235 is possible. The near-term resistance is around 0.8385. A jump above 0.8400/0.8435 is possible. Bearish invalidation is only above 0.84350.

Indicator (4-hour chart)

CCI (50)- Bearish

Average directional movement Index - Bearish

It is good to sell on rallies around 0.8378-80 with SL around 0.8435 for a TP of 0.8285.