- The euro declined, hovering away from a 4-1/2 month peak recorded in the prior session against the British pound.
- On Wednesday, the pair rallied on the back of upbeat Eurozone IHS Markit’s Composite Purchasing Managers’ Index, but closed 0.8 percent lower at 0.8647 as incoming Bank of England Governor Andrew Bailey hurt expectations for a BoE rate cut.
- Bailey stated that any central bank measures would be best done in tandem with Britain’s government.
- EUR/GBP is trading 0.2 percent down at 0.8630, having hit a high 0.8744 on Wednesday, its highest since October 15.
- Momentum indicators are bearish on hourly charts: RSI weak at 26, MACD supports downside and Stochs are biased lower.
- Immediate resistance is located at 0.8694, a break above could take it near 0.8714.
- On the downside, support is seen at 0.8594 (7-EMA), a break below could drag it till 0.8581.
Recommendation: Good to sell on rallies around 0.8641 with stop loss of 0.8664, and target price of 0.8594.
