EURGBP showed a minor pullback on board-based Pound sterling weakness. Intraday bias remains bullish as long as support 0.8300 holds. It hit a high of 0.83614 at the time of writing and is currently trading around 0.83582.
The UK economy is facing significant challenges, showing only 0.1% growth in the third quarter of 2024, down from 0.5% the previous quarter. It fell into recession at the end of 2023 and has struggled to recover, with many sectors stagnating. Productivity growth is also low due to a lack of business investment and high inequality. In contrast, the Eurozone economy is slow but not contracting as sharply as the UK's, with the European Central Bank managing inflation while trying to support growth. Overall, while both regions have issues, the UK's economic situation appears much more troubling than that of the Eurozone. Thus, the UK currently looks weaker compared to its Eurozone neighbors.
Technical Analysis
The pair is currently trading above 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 0.8260/0.8235 or 0.8200 is likely.
Near-Term Resistance: Current resistance is around 0.8360. If it breaks above, we could see movement toward 0.8380/0.845/0.8500. The bearish outlook would be invalidated only if the price goes above 0.8500.
Indicator Analysis (4-hour chart)
- CCI (50): Bullish
- Average Directional Movement Index: Neutral
Trading Recommendation
It may be wise to buy on dips around 0.8340, with a stop loss set at 0.8300 and a target price of 0.8450.
