EUR/GBP Price Forecast: Extends downside, initial support level emerges below 0.8300

• EUR/GBP extends the decline to near 0.8310 in Friday’s early European session. 
• The negative outlook of the cross remains intact as the price holds below the 100-day EMA, with bearish RSI indicator. 
• The immediate resistance level emerges at 0.8355; the first downside target is seen at 0.8290.

The EUR/GBP cross remains on the defensive around 0.8310 on Friday during the early European trading hours. The Bank of England (BoE) cut interest rates by 25 basis points (bps) at its November meeting on Thursday, bringing the benchmark rate to 4.75%. BOE Governor Andrew Bailey said during the press conference that the central bank needs to retain a “gradual approach” to policy easing.

However, the expectation that the BoE would cut rates less aggressively than the European Central Bank (ECB) could provide some support to the Pound Sterling (GBP) and cap the upside for the cross in the near term. 

According to the 4-hour chart, the negative outlook of EUR/GBP prevails as the cross remains capped below the key 100-period Exponential Moving Averages (EMA). Furthermore, the downward momentum is reinforced by the Relative Strength Index (RSI), which is located below the midline near 35.55, indicating that the further downside cannot be ruled out. 

The first downside target for the cross emerges near the lower limit of the descending trend channel at 0.8290. A breach of this level could see a drop to 0.8230, the low of March 4, 2022. The next contention level to watch is the 0.8200 psychological level.

In the bullish case, the crucial resistance level is seen at 0.8355, representing the confluence of the upper boundary of the trend channel and the 100-period EMA. A decisive break above this level could see a rally to 0.8419, the high of November 4.  

EUR/GBP 4-hour chart