FxWirePro: EUR/GBP capped at 21-EMA, outlook bearish
EUR/GBP chart - Trading View
EUR/GBP was trading marginally lower at 0.9022, down 0.15% at 05:30 GMT, outlook is bearish.
Recovery in the pair was capped at stiff resistance at 21-EMA and 200H MA, techs are biased lower.
The Bank of England (BoE) on Thursday left interest rates unchanged at an all-time low of 0.1% and bond-buying program unchanged at £745 billion.
In the accompanying policy statement, the central bank said that the economic downturn was less severe than initially thought and also upgraded its current year economic growth projection.
Upbeat forecasts by the central bank which offered some optimism provided a modest lift to the British pound.
However, markets quickly faded gains. EUR/GBP pared losses from session lows at 0.8984 to close at 0.9036.
Technical bias for the pair remains bearish. Upside capped at stiff resistance at 21-EMA and 200H MA.
Brexit headlines and major data could provide clear direction. Of major significance on the data front will be next weeks' UK GDP released on August 12th along with UK trade data, and the same data for the EU due Friday, August 14th.
Decisive break below 0.90 mark could see drag till 0.8920 (110-EMA). Bearish invalidation only on Triangle breakout.
Major Support Levels:
S1: 0.90 (55-EMA and Triangle base)
S2: 0.8923 (Cloud base)
S3: 0.8919 (110-EMA)
Major Resistance Levels:
R1: 0.9038 (200H MA)
R2: 0.9040 (21-EMA)
R3: 0.9085 (50% Fib)
Summary: Bias is bearish. Watchout for breach at 0.90 handle for further weakness.