The Euro (EUR) inched lower against the Great Britain Pound (GBP) on Wednesday, decreasing the price of EURGBP to less than 0.8450 ahead of the ECB head Mario Draghi speech. The technical bias has turned bearish because of a lower low in the recent downside move.
As of this writing, the pair is being traded near 0.8404. A support can be noted around 0.8398 (an immediate trendline support as well as horizontal support zone) as demonstrated in the given below chart. A break and four-hour closing below the 0.8398 support shall incite renewed selling interest, validating a move towards the 0.8320 support area.
On the upside, a hurdle may be noted around 0.8420 (the 50% fib level resistance area) ahead of 0.8449 (the horizontal resistance level) and then 0.8500 (the psychological number) as demonstrated in the given above chart. The technical bias shall remain bearish as long as the 0.8500 resistance area is intact.
What Assets to Trade
In addition to EURGBP, trading GBPCAD, GBPAUD and GBPUSD can be a good strategy as the aforementioned pairs are highly reactive to the Draghi’s remarks
How EURGBP Reacted on Past Draghi remarks?
In past, we have seen that EURGBP always reacted negatively and showed downside movement after dovish remarks by Mario Draghi. The pair, however, shows positive momentum and rises noticeably after hawkish comments by the ECB head.
How to Trade today’s Draghi Speach?
Buying the pair around current levels may be a good strategy if Draghi remains hawkish in his comments and vice versa.
* FXOpen International, best ECN broker of 2021, according to the IAFT