EURGBP seeks a new signal for direction

EURGBP experienced a decline in early Thursday’s trading session, following two unsuccessful attempts to break above the falling 100-day moving average (0.8572) and the formidable resistance zone around 0.8580 (comprising the Fibonacci 38.2% retracement of the downtrend from 0.8714 to 0.8498 and multiple spike highs).

The British pound rebounded after being subdued by UK CPI data and a dovish tone from BoE Governor Bailey on Wednesday. However, further clarity regarding the short-term direction is required, as daily indicators present a mixed picture.

A strong support level lies at 0.8550 (where the 5-day and 55-day moving averages converge, potentially forming a bullish crossover). Maintaining above this level could favor the bulls’ near-term bias, prompting a fresh attempt to surpass the 0.8580 resistance pivots. Success here could pave the way for an extension towards significant barriers around the 0.8600 zone (including the 50% retracement level and the 200-day moving average).

On the flip side, a breach of the 0.8550 level would weaken the near-term market structure, increasing the risk of renewed downward pressure towards the critical support zone around 0.8520/00.

Res: 0.8572; 0.8604; 0.8620

Sup: 0.8550; 0.8520; 0.8499