Bullish Trend Regains Control to Offer Buying Opportunities on Pullbacks

Economic

Central Bank

Summary:

If price retests the support zone at 0.8540—which aligns with the 100-period moving average—this area could offer opportunities to join the uptrend, targeting 0.8650.

BUY EURGBP

EXP

PENDING

0.85500

Entry Price

0.86500

0.84920

0.85733 +0.00029 +0.03%

Pips

PENDING

0.84920

Exit Price

0.85500

Entry Price

0.86500

Net short positions on sterling increased during the week leading up to the Bank of England's (BoE) latest monetary policy meeting. Although the Monetary Policy Committee (MPC) presented a vote split that was more hawkish than market expectations, the tone adopted by Governor Andrew Bailey was interpreted as dovish, limiting support for the British currency.

During the post-meeting press conference, Bailey was emphatic in stressing that investors should not interpret the central bank's comments as a signal of an upcoming rate hike, reinforcing the perception that the BoE maintains a cautious stance regarding future monetary adjustments.

In the Eurozone, macroeconomic data continued to show a mix of solid growth and persistent inflationary pressures. Headline inflation accelerated to 2.9% year-over-year in July from 2.8% recorded previously, while core inflation unexpectedly rebounded to 2.5%. This behavior reinforces expectations that the European Central Bank (ECB) will maintain a tight policy stance over coming months.

The region's economy also posted a stronger-than-expected performance. Eurozone Gross Domestic Product (GDP) grew 0.4% quarter-over-quarter during the second quarter, doubling consensus expectations and recording its fastest pace of expansion since early 2025. On an annual basis, growth accelerated to 1.0%, reflecting a gradual improvement in economic activity.

In Germany, inflationary pressures showed signs of an uptick. The preliminary Harmonized Index of Consumer Prices (HICP) advanced to 2.8% year-over-year in July, up from the 2.4% observed in June, suggesting greater persistence in price pressures.

On the other hand, manufacturing activity continued to recover. Germany's Manufacturing PMI rose to 52.2 points in July, reaching its highest level in four months, while the equivalent indicator for the Eurozone advanced to 51.9 points, reflecting the solidest expansion in industrial activity since April. Bullish Trend Regains Control to Offer Buying Opportunities on Pullbacks_1

Bullish Trend Regains Control to Offer Buying Opportunities on Pullbacks_1

Technical Analysis

EURGBP bounced strongly to the upside after touching a local low of 0.8454 on July 15, eventually breaking above the 200-period moving average and reaching the 0.8585 level on July 30. Although price action launched a downward correction, it remained very shallow and quickly pushed back above the 200-period moving average sitting at 0.8561, while the 100-period moving average lies at 0.8535. If price retests the support zone at 0.8540—which aligns with the 100-period moving average—this area could offer opportunities to join the uptrend, targeting 0.8650.

Looking at the oscillators, the RSI sits at the 57 level. Although it completed a quick pullback to the 42 level, this indicates that the RSI dipped considerably while price only made a small retracement, showing that bears are losing momentum rapidly. Meanwhile, the MACD histogram has transitioned back into positive territory, with the signal lines remaining firmly in bullish ground, indicating that the path of least resistance remains to the upside.

Trading Recommendations

Trading direction: Buy

Entry price: 0.8550

Target price: 0.8650

Stop loss: 0.8492

Validity: Aug 14, 2026 15:00:00

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Bullish Trend Regains Control to Offer Buying Opportunities on Pullbacks

Technical Analysis

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