EURGBP TECHS: Unwinding An Oversold Trend Condition

• RES 4: 0.8875 High Apr 25 and key short-term resistance
• RES 3: 0.8835 High May 3
• RES 2: 0.8767 50-day EMA
• RES 1: 0.8729 20-day EMA
• PRICE: 0.8677 @ 15:53 BST May 23
• SUP 1: 0.8661 Low May 11
• SUP 2: 0.8649 76.4% retracement of the Dec 1 - Feb 3 bull run
• SUP 3: 0.8593 Low Dec 15 2022
• SUP 4: 0.8562 Low Dec 13 2022

EURGBP slipped through the London close, narrowing the gap with first support at Friday’s 0.8668. The trend condition is bearish and the latest pause appears to be a bear flag. The recent breach of 0.8719, Mar 15 low, confirmed a resumption of the bear cycle and this has opened 0.8649, a Fibonacci retracement. Initial firm resistance is at 0.8729 the 20-day EMA. The 50-day EMA intersects at 0.8767 where a clear break is required to signal a reversal.

• *NAGEL: ECB RATES TO STAY RESTRICTIVE FOR SUFFICIENTLY LONG TIME – bbg
• *ECB’S NAGEL SAYS ‘SEVERAL’ INTEREST-RATE HIKES STILL NEEDED - bbg

• Speaking in Berlin, Bundesbank’s Nagel says “The course of monetary policy tightening has not yet come to an end,”… “Several rate hikes will still be necessary to reach a sufficiently restrictive level. And we will then have to maintain this level for a sufficiently long time. Until inflation has come down.”
• The tone reiterates May 12 comments that more ECB rate hikes look necessary and tightening might be required after the summer break, with subsequently little immediate reaction in EURUSD (holding -0.3% at 1.0777 off earlier session lows of 1.076 for joint lows with May 19 and initial support).