- The Euro remains on its back foot on Monday amid lower hopes of BoE cuts.
- Technical indicators show scope for further Euro decline.
- A double top above 0.8740 anticipates a potential trend shift.
The Euro is trading lower for the third consecutive day on Monday, against a stronger British Pound, which got a boost last week, after the split vote at the Bank of England’s Monetary Policy Meeting prompted investors to dial down hopes for further rate cuts.
The BoE cut rates to 4% from the previous 4.25%, as expected, but the dissenting vote from four policymakers and the unexpectedly hawkish tone, warning about further rapid monetary easing, sent the Pound higher across the board
Technical Analysis: Key support is at 0.8615
The EUR/USD pair’s immediate trend is bearish. A double top at the 0.8740-08750 area is a common figure from trend shifts, and the impulsive bearish candle on Thursday, coupled with the bearish divergence in the daily chart, suggests that the upside trend from late May lows has come to an end.
The Pair is now testing support at Friday´s low, 0.8655, but the key support area is at 0.8610, the July 30 and 21 lows, and the neckline of the mentioned DT figure and the 38.2% Fibonacci resistance of the mentioned rally at 0.9600. The DT’s measured target is 0-8490.
On the upside, immediate resistance is at Friday’s high of 0.8680. Above here, next is the Area between August 7 and July 28, highs at 0.8740-0.8750 and then, probably around the the 0.8830 area (May 2023 highs).
