EUR/GBP Drops To Nine-Month Lows, Eyes 0.8500
Image Source: Unsplash
- UK data and BoE rate hike expectations support the Pound.
- EUR/GBP breaks below 0.8540, to fresh multi-month lows.
The EUR/GBP is breaking below the support area of 0.8540 and is currently trading around 0.8530, its lowest level since August 2022. The cross resumed its downward trend after a brief pause and a short-lived rebound following the European Central Bank (ECB) meeting.
On Thursday, as expected, the ECB raised rates by 25 basis points. Despite the hawkish tone from President Lagarde, who mentioned that another hike in July was likely, the EUR/GBP only rose modestly approaching 0.8600, and then weakened again.
Next Thursday, the Bank of England (BoE) will announce its decision, and a 25 basis points hike is expected. "Even though the BoE was among the first of the large central banks to engage in rate hikes, the UK's persistent inflation means it will be among the last to complete its hiking cycle," said analysts at Rabobank.
The expectation that the BoE will continue to raise rates after the ECB and the Fed end their tightening cycles has been supporting the Pound. This week, the Sterling has outperformed those expectations and also following upbeat UK employment data.
Technical Outlook
The EUR/GBP is currently exhibiting a clear bearish bias, and a consolidation below 0.8530 would likely pave the way for further losses. The next levels to watch are the 0.8500 area, followed by support at 0.8480. However, a recovery above 0.8550 would alleviate some of the bearish pressure.
To improve the short-term outlook, the Euro needs to climb above 0.8610, which is a horizontal resistance level and the 20-day Simple Moving Average. Breaking above this level would signal that the bulls are gaining strength and could potentially push the cross higher.
Technical levels
EUR/GBP
| OVERVIEW | |
|---|---|
| Today last price | 0.8535 |
| Today Daily Change | -0.0027 |
| Today Daily Change % | -0.32 |
| Today daily open | 0.8562 |
| TRENDS | |
|---|---|
| Daily SMA20 | 0.8623 |
| Daily SMA50 | 0.8714 |
| Daily SMA100 | 0.8773 |
| Daily SMA200 | 0.8753 |
| LEVELS | |
|---|---|
| Previous Daily High | 0.8592 |
| Previous Daily Low | 0.8544 |
| Previous Weekly High | 0.8636 |
| Previous Weekly Low | 0.8541 |
| Previous Monthly High | 0.8835 |
| Previous Monthly Low | 0.8583 |
| Daily Fibonacci 38.2% | 0.8573 |
| Daily Fibonacci 61.8% | 0.8562 |
| Daily Pivot Point S1 | 0.854 |
| Daily Pivot Point S2 | 0.8518 |
| Daily Pivot Point S3 | 0.8492 |
| Daily Pivot Point R1 | 0.8587 |
| Daily Pivot Point R2 | 0.8613 |
| Daily Pivot Point R3 | 0.8635 |
More By This Author:
USD/JPY Price Analysis: Climbs Firmly Above 141.00 As BoJ Continues Ultra-Dovish Policy StanceUSD/JPY Price Analysis: Bulls Could Be About To Step In Again At Prior Resistance
US Dollar Index Fails To Capitalize On Upbeat Retail Sales And Falls Sharply Below 103.00
Disclaimer: Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only ...
more
Comments
