Policy Gap Fuels EURGBP Rally: Eyes on 0.8605

EURGBP gained sharply on policy divergence between the ECB and BOE. Intraday bias remains bullish as long as support 0.8450 holds. It hit an intraday high of 0.85378 and is currently trading around 0.85266.

Following seven consecutive rate cuts over 13 months, the ECB has proposed that its monetary policy easing cycle be put on hold, resulting in the deposit facility rate going up to 2.00% in June 2025. President Christine Lagarde and other officials believe that the cycle is coming to a close with inflation approaching the 2% target and recent cuts implemented, underscoring the importance of using data for future decisions.

Technical Analysis

The pair is currently trading above 55 and 200- EMA and 365-EMA on the 4-hour chart.

Bearish Trend Confirmation: Any break below 0.8480 confirms an intraday bearish trend. A drop to 0.84425/0.8400/0.8378/0.8340/0.8300 is likely.

Near-Term Resistance:  The near-term resistance is around 0.8550. Any violation above will take the pair to 0.8605/ 0.8660/0.8765/0.8800.

Indicator Analysis (4-hour chart)

• CCI (50): Bullish
   
• Average Directional Movement Index:  Bullish

Trading Recommendation

It is good to buy on dips around 0.8500 with SL around 0.8480  for a TP of 0.8605.