EURGBP trades weak due to policy divergence between the ECB and BOE. Intraday bias remains bearish as long as resistance 0.8380 holds. It hit a high of 0.83427 at the time of writing and is currently trading around 0.83298.
Recent economic data from the UK reveals worrying trends across several sectors. The Manufacturing PMI dropped to 51.5 in September, signaling modest growth but slowing activity due to reduced new orders and concerns about future demand. The services sector also showed weakness, with a flash PMI reading of 51.8, indicating declining momentum. Additionally, consumer confidence remains low at -20, and the CBI Business Optimism Index has fallen to -24, highlighting widespread pessimism among consumers and businesses about the economic outlook.
Technical Analysis
The pair is currently trading below the 34- and 55-EMA on the 4-hour chart.
- Bearish Trend Confirmation: If the price stays below 0.8300, it will confirm an intraday bearish trend. A drop to 0.8280 or 0.8235 is likely.
- Near-Term Resistance: Current resistance is around 0.8350. If it breaks above, we could see movement toward 0.8380, 0.8400, or 0.8435. The bearish outlook would be invalidated only if the price goes above 0.8435.
Indicator Analysis (4-hour chart)
- CCI (50): Bullish
- Average Directional Movement Index: Neutral
Trading Recommendation
It may be wise to sell on rallies around 0.8350-525, with a stop loss set at 0.8380 and a target price of 0.8285.
