- EUR/GBP gains some traction for the fourth day in a row and climbs to new highs in over a year.
- The prospects of a less aggressive Bank of England and the Scottish referendum continued to weigh on the pound sterling.
- Market participants expect the ECB’s ad hoc meeting to provide some significant momentum.
The crossing EUR/GBP extends the previous day’s bullish momentum above the 0.8600 level and gains some traction for the fourth day in a row. The strong movement has taken the crossing to a new one-year high, around the region of 0.8720 during the European session on Wednesday.
Macroeconomic data from the UK, especially the monthly GDP report released on Monday, which showed a surprising contraction in April, suggest that the Bank of England could take a more cautious approach to raising interest rates. This, along with the impasse between the UK and the EU over the Northern Ireland protocol of the Brexit agreement and the prospects of a new referendum on Scottish independence, weighed on the pound sterling.
On the other hand, the common currency was supported by a more aggressive turn by the European Central Bank (ECB), which indicated that in July it would carry out its first rate hike since 2011. The ECB also left the door open for a potentially bigger move in Septemberwhich was seen as another factor that continued to act as a tailwind for the EUR/GBP cross and continued to support the strong move higher.
That said, the recent expansion of the spread between yields in Germany and struggling southern countriesparticularly Italy, which soared to its highest in more than two years, capped profits. Therefore, the market’s attention will continue to focus on the meeting of the ad hoc Governing Council of the ECB to discuss the recent sale of public debt marketsscheduled for 09:00 GMT on Wednesday.
Investors will also be closely watching ECB President Christine Lagarde’s speech, scheduled for later in the American session. Next, the market’s attention will shift to Thursday’s Bank of England monetary policy meeting, which will play a key role in influencing short-term sentiment around the British pound. This, in turn, would provide a further directional boost to the EUR/GBP cross.
EUR/GBP technical levels
EUR/GBP
Panorama | |
---|---|
Last Price Today | 0.8711 |
Today’s Daily Change | 0.0029 |
Today’s Daily Change % | 0.33 |
Today’s Daily Opening | 0.8682 |
Trends | |
---|---|
20 Daily SMA | 0.853 |
50 Daily SMA | 0.8456 |
100 Daily SMA | 0.8413 |
200 Daily SMA | 0.8443 |
levels | |
---|---|
Previous Daily High | 0.8716 |
Previous Daily Minimum | 0.8552 |
Previous Maximum Weekly | 0.8592 |
Previous Weekly Minimum | 0.8486 |
Monthly Prior Maximum | 0.8619 |
Previous Monthly Minimum | 0.8367 |
Daily Fibonacci 38.2% | 0.8653 |
Daily Fibonacci 61.8% | 0.8615 |
Daily Pivot Point S1 | 0.8584 |
Daily Pivot Point S2 | 0.8486 |
Daily Pivot Point S3 | 0.842 |
Daily Pivot Point R1 | 0.8748 |
Daily Pivot Point R2 | 0.8814 |
Daily Pivot Point R3 | 0.8912 |
Source: Fx Street
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