FxWirePro- EURGBP Trade Idea
The pair showed a minor pullback after the BOE rate cut. Intraday bias remains bullish as long as support 0.8290 holds. It hit an intraday high of 0.83777 and is currently trading around 0.83656.
The BoE has reduced its official bank rate from 4.75% to 4.50%, the lowest in over 18 months, with the decision coming when the economy appeared to stall and inflation recently slipped to 2.5%. Though inflation remains above the 2% target, many economists think it will continue falling to allow for a rate cut. It now thinks inflation is going to reach its target by the last quarter of 2027 - six months later. Cuts in interest rates will help push up spending and put the economy back on track, it believes, but it says this will also take pressure off household budgets, helping mortgage borrowers and affecting rates for loans and savings accounts as well.
Technical Analysis
The pair is currently trading above the 34- and 55-EMA on the 4-hour chart.
- Bearish Trend Confirmation: Any break below 0.8290 confirms an intraday bearish trend. A drop to 0.8260/0.8220/0.8190 is likely.
- Near-Term Resistance: Current resistance is around 0.83850. Any violation above will push towards 0.8400/0.8450/0.8470/0.8500/0.8580. The bearish outlook would be invalidated only if the price goes above 0.8500.
Indicator Analysis (4-hour chart)
- CCI (50): Neutral
- Average Directional Movement Index: Neutral
Trading Recommendation
It is good to buy on dips around 0.8340 with a stop loss around 0.8290 for a target price of 0.8470.
