EURGBP Bearish Bias: Bailey's Words Weigh on the Pound

1. EURGBP Bearish Bias: Bailey's Words Weigh on the Pound

EURGBP pared some of its gains after a minor pullback. Intraday bias remains bearish as long as resistance 0.8550 holds. It hit an intraday low of 0.84580 and is currently trading around 0.84756.

Bank of England Governor Andrew Bailey, in his address today, reaffirmed the central bank's unequivocal commitment to the 2% inflation goal, highlighting interest rates are not on autopilot and the latest rate reduction to 4.25% was a cautious response in the context of global economic uncertainty, but once again invoking rebooting trade relations with the EU and warning that trade tensions and not being able to bounce back will have an impact on the UK's inflation landscape.

Technical Analysis

The pair is currently trading below the 34- and below 55-EMA on the 4-hour chart.

Bearish Trend Confirmation: Any break below 0.8450 confirms an intraday bearish trend. A drop to 0.8378/0.8300 is likely.

Near-Term Resistance:  The near-term resistance is around 0.8550. Any violation above will take the pair to 0.8605/ 0.8660/0.8765/0.8800.

Indicator Analysis (4-hour chart)

• CCI (50): Bearish
   
• Average Directional Movement Index:  Bearish

Trading Recommendation

It is good to sell on rallies around 0.8500 with SL around 0.8550 for a TP of 0.8380.