Bullish Opportunities Emerge After Another Rejection at Support

Central Bank

Economic

Summary:

Such extreme conditions often attract buying interest, particularly when accompanied by strong rejection candles similar to those seen during the recent rebound from support.

BUY EURGBP

EXP

TRADING

0.84756

Entry Price

0.85300

0.84300

0.84795 +0.00087 +0.10%

0.0

Pips

Flat

0.84300

Exit Price

0.84756

Entry Price

0.85300

Bank of England (BoE) policymaker Catherine Mann, widely regarded as one of the more hawkish members of the committee, acknowledged that the central bank misjudged some of the consequences stemming from the energy supply shock. During a speech delivered on Thursday at the Nomura London Macro Forum, Mann suggested that policymakers should have acted more decisively when the conflict involving Iran first escalated in order to contain inflationary pressures.

Meanwhile, Bank of England Monetary Policy Committee member Alan Taylor stated on Tuesday that monetary policy should not respond mechanically to fluctuations in energy prices. However, he also noted that if inflationary pressures intensify and second-round effects begin to emerge, policymakers would need to reassess the appropriate stance of monetary policy.

At the Bank of England’s most recent meeting, Taylor voted in favor of keeping interest rates unchanged, while the majority maintained the benchmark rate at 3.75%. He added that the argument for further tightening would become stronger if elevated energy prices persist for an extended period.

In the Eurozone, concerns surrounding France’s public finances continue to weigh on the common currency. Persistent uncertainty has pushed French borrowing costs higher and widened sovereign bond spreads. Prime Minister Sebastien Lecornu aims to reduce the fiscal deficit from 5.4% of Gross Domestic Product this year to 5.0% by 2027, although strong political opposition may complicate the approval of the proposed budget.

These concerns, together with the broader selloff in global bond markets, have contributed to higher French borrowing costs as investors demand additional compensation for holding the country’s debt. Bank of France Governor Emmanuel Moulin described current bond market conditions as “complicated” and stated that France’s economic situation remains “serious,” while emphasizing that the country is not currently facing an economic crisis. He also stressed that approval of the 2027 budget is essential for restoring market confidence.

Economic activity across the Eurozone has shown encouraging signs in recent months. The Manufacturing PMI remained at its highest level in four years during September, while industrial production continues to expand at its fastest pace in nearly five years. New orders and backlogs are also increasing, pointing to a continued improvement in underlying demand.

On Wednesday, Governor Moulin reiterated that tensions in the French bond market remain significant but do not meet the conditions required for intervention from the European Central Bank (ECB). French 10-year government bond yields resumed their advance after the temporary relief seen earlier in the week. Bullish Opportunities Emerge After Another Rejection at Support_1

Bullish Opportunities Emerge After Another Rejection at Support_1

Technical Analysis

EURGBP recently tested the local support level at 0.8460 once again, a zone that was previously reached on July 15. During that earlier test, the pair produced a strong bullish reaction, and the latest rebound from the same area suggests that buyers continue to defend this support aggressively. As long as this zone remains intact, the possibility increases for a recovery toward the resistance area located at 0.8530.

This resistance level is particularly relevant because it aligns closely with the 50% Fibonacci retracement level, increasing its technical significance. In addition, the 100-period and 200-period moving averages are currently positioned at 0.8563 and 0.8553 respectively. As these averages gradually move closer to the resistance zone over time, they could reinforce the area as an important upside target and add further weight to the bullish retracement scenario.

In the oscillator area, the RSI is currently trading near 31 after recently reaching an extreme oversold reading of 12 on October 4. Such extreme conditions often attract buying interest, particularly when accompanied by strong rejection candles similar to those seen during the recent rebound from support. Meanwhile, the MACD histogram has almost completely lost its bearish depth, suggesting that a bullish crossover may be approaching. The signal lines remain deeply positioned within bearish territory, indicating that the broader trend has not yet shifted. For now, any upside move should still be viewed as a corrective retracement, although improving momentum indicators are beginning to support a more constructive outlook.

Trading Recommendations

Trading direction: Buy

Entry price: 0.8476

Target price: 0.8530

Stop loss: 0.8430

Validity: Oct 20, 2026 15:00:00

Risk Warnings and Disclaimers

You understand and acknowledge that there is a high degree of risk involved in trading. Following any strategies or investment methods may lead to potential losses. The content on the site is provided by our contributors and analysts for information purposes only. You are solely responsible for determining whether any trading assets, securities, strategy, or any other product is suitable for investing based on your own investment objectives and financial situation.

Risk Disclosure

The risk of loss in trading financial instruments such as stocks, FX, commodities, futures, bonds, ETFs and crypto can be substantial. You may sustain a total loss of the funds that you deposit with your broker. Therefore, you should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources.

No decision to invest should be made without thoroughly conducting due diligence by yourself or consulting with your financial advisors. Our web content might not suit you since we don't know your financial conditions and investment needs. Our financial information might have latency or contain inaccuracy, so you should be fully responsible for any of your trading and investment decisions. The company will not be responsible for your capital loss.

Without getting permission from the website, you are not allowed to copy the website's graphics, texts, or trademarks. Intellectual property rights in the content or data incorporated into this website belong to its providers and exchange merchants.

Recent Searches

Top Searches

Markets

Analysis

User

24/7

Economic Calendar

Education

Data

Bullish Opportunities Emerge After Another Rejection at Support

Technical Analysis

Risk Disclosure