EUR/GBP Price Analysis: Bears dominate after ECB decision and Lagarde's cautious tone

• The EUR/GBP pair experienced losses and settled at 0.8530, losing 0.30%.
• The ECB kept rates stable, as expected.
• Christine Lagarde declined to comment on the ECB's rate cut schedule.
• Divergences in monetary policy give traction to the pound against the Euro.

In Thursday's session, the pair EUR/GBP was observed at a trading level of 0.8530, with a loss of 0.30%. The bears seem to be gaining ground as the daily chart shows a bearish outlook. The four-hour chart extends this negative forecast, reflecting greater dominance of sellers in the current state of the market.

In this sense, the EUR/GBP pair weakened following the caution of the European Central Bank (ECB) regarding lower interest rates, with minimal signs of interest rate cuts, and for now the markets do not expect a rate cut until June. In contrast, the Bank of England (BoE) maintains a stable policy and markets expect a smaller easing than the ECB, of 125 basis points in 2024, which gives strength to the Pound sterling. Therefore, both the possible easing of the ECB and the firmness of the BoE are pushing the cross lower. Another factor benefiting the pound is that the British economy is resisting the BoE's monetary policy, which is pushing the bank to delay rate cuts.

EUR/GBP levels to watch

The indicators on the daily chart show a bearish market. The Relative Strength Index (RSI) is observed in a bearish trend, maintaining its location in the negative sector pointing to an ongoing bearish momentum. At the same time, moving average convergence divergence (MACD) indicators show an increasing number of red bars, a sign that selling pressure is increasing. Furthermore, the cross's position below the 20-day, 100-day, and 200-day simple moving averages (SMA) corroborates the bearish stance.

Bearish sentiment persists. The four-hour chart continues to reflect the negative scenario with the indicators reinforcing the bearish outlook. The Relative Strength Index (RSI) persists in negative territory with its negative slope indicating that the bears continue to control the momentum. For its part, the convergence divergence on the four-hour moving average (MACD) shows ascending red bars, which again signals an increase in selling activity.

EUR/GBP Daily Chart