EUR/GBP Price Analysis: Fades bounce off golden Fibonacci ratio near 0.8700 on BoE day
- EUR/GBP retreats from intraday high, reverses the previous day’s bounce off yearly low.
- 61.8% Fibonacci retracement joins nearly oversold RSI conditions to prod sellers.
- Four-month-old previous support line, 200-DMA restrict buyer’s entry amid hawkish BoE bias.
EUR/GBP struggles to defend the previous day’s rebound from the Year-To-Date (YTD) low as it flirts with the 0.8700 round figure on the Bank of England (BoE) Interest Rate Decision day. That said, today’s quarterly release of the BoE Monetary Policy Report makes it the “Super Thursday”.
Also read: Bank of England Preview: Bailey to break Pound's rally with reluctance to raise rates further
The pre-BoE anxiety prods the EUR/GBP pair’s rebound from the 61.8% Fibonacci retracement of August-September 2022 upside, also known as the golden Fibonacci ratio, amid the nearly oversold RSI (14) conditions.
However, the quote’s sustained downside break of the four-month-old horizontal trend line and the 200-DMA, respectively near 0.8715 and 0.8740, keeps the EUR/GBP bears hopeful.
On the other hand, a daily closing below the 61.8% Fibonacci retracement level of around 0.8685 could witness multiple supports around the 0.8650-45 zone.
In a case where the EUR/GBP sellers remain in the driver’s seat past 0.8645, the 0.8600 round figure and the late 2022 low of around 0.8550 may lure the pair bears.
Overall, EUR/GBP remains on the bear’s radar despite the latest corrective bounce. However, the BoE is a surprise factor to closely watch.
EUR/GBP: Daily chart
Trend: Limited downside expected