- EUR/GBP stays heavy near the weekly bottom surrounding 0.9100.
- Oversold RSI conditions, nearness to Bank of England’s rate decision restricts market moves.
- A confluence of 200-bar SMA, 61.8% Fibonacci retracement becomes the key support.
- Bulls will seek entries on a bounce-back beyond two-week-old rising trend line.
EUR/GBP remains on the back foot around the day’s low of 0.9095, down 0.15% currently, while heading into the European open on Thursday. The pair’s weakness takes clues from the downside break of an ascending trend line from September 03 and 50-bar SMA.
However, further selling has been probed by the oversold RSI conditions and the pair traders’ wait for the Bank of England (BOE) monetary policy decision. Even if the “Old Lady” is expected to stand pat on the interest rate and Quantitative Easing (QE), wordings of the rate statements will be important in today’s event.
Read: Bank of England Preview: Fast recovery or trio of troubles? Bank’s tone to set pound’s direction
Should the bears keep the reins after the BOE, September 09 low of 0.9067 can offer an intermediate halt during the south-run towards 0.9033-28 support-zone comprising 200-bar SMA and 61.8% Fibonacci retracement of the early month’s upside by EUR/GBP.
On the contrary, 50-bar SMA and the previous support line, respectively around 0.9140 and 0.9155, can probe the bulls during any corrective bounce.
If the EUR/GBP prices remain strong beyond 0.9155, the 0.9200 threshold and 0.9255-60 may entertain the optimists ahead of driving them to the monthly peak close to 0.9290.
EUR/GBP four-hour chart
Trend: Pullback expected