EUR/GBP falls to new 23-month lows near 0.8300

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  • Sterling among top performers supported by UK CPI figures.
  • EUR/GBP extends decline, starts to look at the 0.8300 level.

The EUR/GBP It broke lower and fell to 0.8312, reaching the lowest level since February 2020. It remains near the bottom, under pressure, eyeing the 0.8300 area on the back of a stronger pound.

UK data boosts GBP

Early on Wednesday, UK CPI data beat expectations, with the annual rate hitting 5.4%, up from 5.1% a month earlier and also beating the 5.2% expected. The figures helped anchor expectations of another rate hike by the Bank of England.

“WIRP is now suggesting that another increase on February 3 be fully priced in, followed by increases at each meeting that would bring the policy rate to 1.25% by the end of the year. Also, the market now sees a 40% chance of a fifth hike this year to 1.50,” analysts at Brown Brothers Harriman said.

Another week, another crash?

The cross is falling for the seventh week in a row. The next key level is located at 0.8300, and below that attention would turn to 0.8270/75 (2019 and 2020 lows). On the upside, key resistance is seen at 0.8380. If the euro recovers above it would alleviate the downward pressure.

Technical levels

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