The EUR/GBP edges higher as the New York session progresses, gains almost half percent, trading at 0.8461 during the day at the time of writing. In the Asian session, the pair reached the day's lows, around 0.8420, as the Bank of England Chief Economist Huw Pill said UK inflation could hit 5%.

In an interview with the Financial Times, Huw Pill said that he would not be surprised if the BoE saw an inflation print close to or above 5% in the following months.  Pill added that for a central bank with an inflation target of 2%, a 5% reading would be "very uncomfortable." From a technical perspective, the intraday positive move faltered near a one-week-old trading range resistance. That said, acceptance above 200-hour SMA favours bullish traders. However, it will still be prudent to wait for a strong follow-through buying before confirming that the EUR/GBP cross has bottomed out and positioning for any further gains.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

In the 1-hour chart, the EUR/GBP pair trades above the 200-simple moving average (SMA), closing to the October 20 high at 0.8460. Around that level lies the R3 pivot point at 0.8462. In the outcome of an upside break, the first resistance level would be the October 15 high at 0.8486. If the pair has enough legs to extend the upward move, the next resistance would be the October 13 high at 0.8497.

Momentum indicator like the Relative Strength Index (RSI) is at 63.50, aiming higher, indicating the EUR/GBP pair has enough room for another leg-up before reaching overbought levels.

EURGBP Breaking Below Major Supply Demand Zone

Oct 24 2021