- The EUR/GBP pair stands at 0.8555, suffering slight losses in the session on Tuesday.
- Divergences between the ECB and the BoE are boosting the pair.
- Markets are fully pricing in a BoE cut in August.
In Tuesday's session, the pair EUR/GBP traded slightly lower at 0.8555, with the cross moving away from daily highs following Andrew Bailey's comments.
Bank of England (BoE) Governor Andrew Bailey warned on Tuesday that the bank does not need to wait for inflation to reach target before cutting rates and, apart from that, did not provide any new guidance stating that “I cannot say when or how much rates will be cut.” Current market expectations are for virtually no chance of a cut on March 21, but instead will rise to almost 25% on May 9 and exceed 60% on June 20. The rate reductions are fully discounted for August 1.
As for the European Central Bank (ECB), investors expect greater easing than the Bank of England, between 100 and 125 basis points, starting in June. However, the data that becomes known will determine the expectations and calendar of the flexibility cycles.
EUR/GBP technical analysis
From a technical point of view, the Relative Strength Index (RSI) of the EURGBP pair shows cooling momentum as it remains in neutral territory. There has been a slight decline in the daily RSI level, suggesting a slowdown in the markets. Meanwhile, looking at the Moving Average Convergence Divergence (MACD), the histogram prints flat green bars, aligning with the RSI. On the other hand, the overall trend remains negative as the pair is trading below the 100-day and 200-day SMA, but if buyers hold above the 20-day average, the pair could see some additional uploads.
EUR/GBP Daily Chart
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
