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EUR/GBP Price Analysis: Dives amid recession fears, post-BoE hike

Pound gains ground as BoE boosts rates; EUR/GBP pair hits 0.8566, sparking recession concerns.
The technical outlook suggests a prolonged EUR/GBP downtrend as cross falls below the 20-day EMA.
Buyers eye EUR/GBP recovery above 0.8600; the critical hurdle lies at 50-day EMA at 0.8657.

The EUR/GBP dropped for the second straight day following Thursday’s Bank of England (BoE) monetary policy decision to raise rates by 50 basis points (bps) which bolstered the Pound Sterling (GBP) against the Euro (EUR). In addition, a deceleration in business activity in the Eurozone (EU) and the UK increased recession fears. Still, upbeat retail sales in the UK exacerbated a leg-down in the EUR/GBP. At the time of writing, the EUR/GBP exchanges hands at 0.8566 after hitting a high of 0.8607.

EUR/GBP Price Analysis: Technical outlook

Given the fundamental backdrop, the EUR/GBP is set to extend its downtrend. Also, the pair crossed below the 20-day Exponential Moving Average (EMA) at 0.8593, a bearish signal that exacerbated the cross fall toward daily lows reached at around 0.8535 before stabilizing at current exchange rates.

Sellers will need the EUR/GBP printing a daily close below the June 22 daily low of 0.8569 to cement the downtrend. That would put at risk support levels like the current two-day low of 0.8535, followed by the weekly low of 0.85255, before challenging the year-to-date (YTD) low of 0.8518.

Otherwise, EUR/GBP buyers would remain hopeful of cracking the 0.8600 figure, though firstly, they need to conquer the 20-day EMA. Upside risks above the 0.86 figure lie at a June 22 high of 0.8639, with buyers eyeing the 50-day EMA as the next ceiling level at 0.8657.

EUR/GBP Price Action – Daily chart

EUR/GBP

Overview
Today last price	0.8566
Today Daily Change	-0.0028
Today Daily Change %	-0.33
Today daily open	0.8594

Trends
Daily SMA20	0.8592
Daily SMA50	0.8691
Daily SMA100	0.8759
Daily SMA200	0.8751

Levels
Previous Daily High	0.8636
Previous Daily Low	0.8574
Previous Weekly High	0.8613
Previous Weekly Low	0.8522
Previous Monthly High	0.8835
Previous Monthly Low	0.8583
Daily Fibonacci 38.2%	0.8598
Daily Fibonacci 61.8%	0.8612
Daily Pivot Point S1	0.8567
Daily Pivot Point S2	0.8539
Daily Pivot Point S3	0.8504
Daily Pivot Point R1	0.8629
Daily Pivot Point R2	0.8664
Daily Pivot Point R3	0.8692

Author

Christian Borjon Valencia

FXStreet

Christian Borjon began his career as a retail trader in 2010, mainly focused on technical analysis and strategies around it. He started as a swing trader, as he used to work in another industry unrelated to the financial markets.

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