EURGBP surged slightly after dovish comments from BOE Bailey. Intraday bias remains bearish as long as resistance 0.8380 holds. It hit a low of 0.82776 at the time of writing and is currently trading around 0.82928.
Yesterday, the Pound Sterling rose strongly against the Euro. This increase is mainly due to expectations that the European Central Bank (ECB) will cut interest rates, which has weakened the Euro. In contrast, the Bank of England is likely to take a more careful approach to rate cuts, making the Pound more attractive to investors. Additionally, a positive economic outlook for the UK, especially regarding potential trade with the United States, has boosted confidence in the Pound. Overall, these factors contributed to the Pound’s strength against the Euro.
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 0.8230, it will confirm an intraday bearish trend. A drop to 0.8190/ 0.8150 is likely.
- Near-Term Resistance: Current resistance is around 0.8280. If it breaks above, we could see movement toward 0.8320/0.8340/0.8360/0.8380/0.845/0.8500. The bearish outlook would be invalidated only if the price goes above 0.8500.
Indicator Analysis (4-hour chart)
- CCI (50): Bearish
- Average Directional Movement Index: Bearish
Trading Recommendation
It may be wise to sell on rallies around 0.8268-70, with a stop loss set at 0.8320 and a target price of 0.8160.
