The pair pared some of its gains after the BOE monetary policy. Intraday bias remains bearish as long as resistance 0.8450 holds. It hit an intraday low of 0.83600 and is currently trading around 0.83677.
The ECB and BoE are diverging in their monetary policy, with the ECB lowering interest rates to stimulate the sluggish Eurozone economy, while the BoE is leaving rates steady due to concerns about an economic downturn and persistent core inflation in the UK. This divergence is founded on different economic conditions and expectations, which may lead to currency value fluctuations as traders respond to interest rate differentials.
Technical Analysis
The pair is currently trading below the 34- and below 55-EMA on the 4-hour chart.
- Bearish Trend Confirmation: Any break below 0.8340 confirms an intraday bearish trend. A drop to 0.8320/0.8290/0.8220/0.8190 is likely.
- Near-Term Resistance: Current resistance is around 0.8450. Any violation above will push towards 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): Bearish
- Average Directional Movement Index: Neutral
Trading Recommendation
It is good to sell on rallies around 0.8400 with a stop loss around 0.8450 for a target price of 0.8300.
