EUR/GBP Extends Decline in Early European Session
- The EUR/GBP cross remains on the defensive around 0.8310 in Friday’s early European trading hours.
- Bank of England (BoE) Cuts Interest Rates by 25 Basis Points
The EUR/GBP cross is facing pressure around the 0.8310 level as traders digest the Bank of England’s decision to cut interest rates by 25 basis points at its November meeting. This move brings the benchmark rate to 4.75%, with BOE Governor Andrew Bailey emphasizing the need for a gradual approach to policy easing during the press conference.
Factors Affecting EUR/GBP
Several factors are influencing the EUR/GBP cross at the moment:
- The negative outlook of the cross remains intact as the price holds below the 100-day EMA.
- Bearish RSI indicator indicates downward momentum.
- Immediate resistance level at 0.8355; first downside target at 0.8290.
Technical Analysis
According to the 4-hour chart, the negative outlook of EUR/GBP prevails as the cross remains capped below the key 100-period Exponential Moving Averages (EMA). The RSI is below the midline near 35.55, suggesting further downside potential.
The first downside target for the cross is near the lower limit of the descending trend channel at 0.8290. A breach of this level could lead to a drop to 0.8230, with the next support level at the psychological level of 0.8200.
In a bullish scenario, a decisive break above the crucial resistance level at 0.8355 could trigger a rally towards 0.8419, the high of November 4.
Pound Sterling FAQs
Here are some frequently asked questions about Pound Sterling (GBP):
- What is the Pound Sterling (GBP)?
The Pound Sterling is the oldest currency in the world, dating back to 886 AD. It is the official currency of the United Kingdom and accounts for 12% of all FX transactions, averaging $630 billion a day. Key trading pairs include GBP/USD, GBP/JPY, and EUR/GBP.
- What Influences the Value of Pound Sterling?
The value of Pound Sterling is influenced by monetary policy decisions by the Bank of England, economic indicators, and trade balance data. Interest rate adjustments, economic data releases, and trade balance figures can all impact the value of GBP.
Overall, the EUR/GBP cross is facing pressure due to the BoE’s rate cut and the negative technical outlook. Traders should closely monitor key support and resistance levels for potential trading opportunities.