The Last Time Price Reached This Zone, It Reacted Strongly to the Upside

Manuel

Central Bank

Economic

Summary:

As long as this support level holds, the technical conditions favor potential buying opportunities.

BUY EURGBP

EXP

TRADING

0.83492

Entry Price

0.84650

0.82500

0.83447 -0.00025 -0.03%

0.0

Pips

Flat

0.82500

Exit Price

0.83492

Entry Price

0.84650

Bank of England (BoE) Governor Andrew Bailey spoke at the Swiss Institute of International Studies (SIAF) in Zurich, Switzerland. He stated that UK economic activity is proving more resilient than previously expected, partly due to investment in artificial intelligence (AI), particularly within business services.

Bailey added that AI, digital technology, and robotics have the potential to support sustainable economic growth. However, he also warned that an AI asset price bubble poses clear risks to financial stability, highlighting the potential consequences of excessive valuations across the sector.

Last week, the Bank of England raised interest rates in a 7-2 vote, with the two dissenting members favoring a larger increase. Although the decision reflected a hawkish stance, BoE Governor Andrew Bailey dismissed the possibility of second-round inflationary effects, stating that there is currently no clear evidence of such pressures emerging.

Eurozone headline inflation increased to 4.0% year-on-year in October, up from 3.8% in September, largely driven by higher energy costs. Meanwhile, core inflation remained unchanged at 2.5%, suggesting that the recent increase in overall price pressures has been concentrated primarily in the energy component.

The European Central Bank (ECB) kept its deposit rate unchanged at 2.50% in October, following a cumulative 50 basis points of increases earlier this year. The decision came as higher energy costs pushed Eurozone inflation further above the central bank's 2% target. Headline inflation reached 4.0% year-on-year in October, while core inflation remained stable at 2.5%.

Market participants are anticipating another ECB rate increase in December. However, these expectations have provided limited support for the Euro against the British Pound, as concerns surrounding France's public finances continue to weigh on the single currency. The Last Time Price Reached This Zone, It Reacted Strongly to the Upside_1

The Last Time Price Reached This Zone, It Reacted Strongly to the Upside_1

Technical Analysis

EURGBP faced strong selling pressure after being rejected near the descending trendline, which remains aligned with the 100-period and 200-period moving averages at 0.8592 and 0.8576, respectively. The pair subsequently declined toward the local low of 0.8322, a level not seen since March. On that previous occasion, price rejected this support and reacted strongly to the upside. If a similar pattern develops again, the current area could provide an opportunity for an upside correction, particularly as price has already begun to show signs of recovery. As long as this support level holds, the technical conditions favor potential buying opportunities.

Looking at the oscillators, the RSI declined to 19, entering extremely oversold territory. These levels have not been observed at any point during the current year, suggesting that selling pressure may be reaching an extended stage and that an upside correction could develop from this area. Meanwhile, the MACD shows a bearish histogram that is rapidly losing depth, although its signal lines remain firmly within bearish territory. Therefore, any potential upside movement should be considered a corrective rebound rather than evidence of an established trend reversal.

Trading Recommendations

Trading direction: Buy

Entry price: 0.8347

Target price: 0.8465

Stop loss: 0.8250

Validity: Nov 20, 2026 15:00:00

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The Last Time Price Reached This Zone, It Reacted Strongly to the Upside

Technical Analysis

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