FxWirePro: EUR/GBP extends cautious trade, focus on BoE policy meet

• ECB President Draghi’s dovish comments at yesterday's speech continues to weigh on the Euro.
   
• Draghi said it’s too early to cheer on bloc’s economic recovery, suggesting that he is in no hurry to raise rates or resort to tapering.
   
• EUR/GBP edges lower for the 5th straight session, extends cautious trade ahead of BoE.
   
• Technical indicators turn bearish after decisive close below 20-DMA, scope for downside.
   
• Immediate support seen at 0.8348 (38.2% Fib), violation there could see drag upto 0.83 (triple bottom).
   
• Focus on the UK manufacturing and industrial production data due on the cards ahead of the BOE meet.
   
• BOE is likely to maintain a dovish stance, with inflation overshooting in recent times that may call for a rate cut in near-term.

Support levels - 0.8348 (38.2% Fib of 0.6930 to 0.9225 rise), 0.83 (Dec 5 2016 & Apr 18 low)

Resistance levels - 0.8423 (5-DMA), 0.8436 (20-DMA), 0.8490 (trendline)

Call update: Our previous call (http://www.econotimes.com/FxWirePro-EUR-GBP-finds-major-resistance-at-08485-intraday-bias-lower-688563) has hit TP1.

Recommendation: Exit at lows. Volatility likely into BoE meet.

FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at --39.2388 (Neutral), while Hourly GBP Spot Index was at 72.0797 (Bullish) at 0540 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.