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.
Bank of England (BoE) Governor Andrew Bailey has suggested that the central bank may make four interest rate cuts in 2025, depending on decreasing inflation pressures. After a recent cut from 5% to 4.75%, rates could drop to 3.75% by the end of the year as inflation falls from 11.1% to 2.3%. This shift allows for more flexible monetary policy to help economic growth without causing inflation to rise again. Overall, there is a cautious optimism about the UK economy as it navigates these changes.
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 0.82600, it will confirm an intraday bearish trend. A drop to 0.8235 or 0.8200 is likely.
Near-Term Resistance: Current resistance is around 0.8320. If it breaks above, we could see movement toward 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: Neutral
Trading Recommendation
It may be wise to sell on rallies around 0.8340, with a stop loss set at 0.8380 and a target price of 0.8200.
