- EUR/GBP updates the daily low after the ECB announced its policy decision, although it lacks follow-up.
- The ECB raises interest rates by 75 basis points and expects to raise interest rates further to curb demand.
- Investors are now waiting for ECB President Lagarde’s remarks at the post-meeting press conference to get a new boost.
The crossing EUR/GBP it retreats further from its highest level since mid-June touched earlier this Thursday and refreshes its daily low after the European Central Bank announced its policy decision. However, the pullback lacks continuity and spot prices seem to have stabilized around the 0.8670 area for now.
As expected, the ECB raised benchmark interest rates by 75 basis points on Thursday and took a more hawkish tone, hoping to continue raising interest rates to curb demand. As the move was fully anticipated in the markets, the announcement did not impress traders or give the common currency any momentum. That said, a modest rally in the British pound appears to be putting some downward pressure on the EUR/GBP cross.
The new British Prime Minister, Liz Truss, announces a cap on energy bills for the next two years, which is seen as a positive development for households. This, in turn, offers some support to the British pound, although the worsening outlook for the UK economy continues to act as a headwind. In addition, the reluctance to make aggressive bets ahead of ECB President Christine Lagarde’s post-meeting press conference limits EUR/GBP’s decline.
Investors will be looking for new clues about the ECB’s near-term monetary policy outlook amid the risk of an extreme energy crisis in Europe and growing recession fears. This, in turn, will play a key role in influencing sentiment surrounding the shared currency and determining the next leg of a directional move for the EUR/GBP cross.
|Last Price Today||0.8685|
|Today’s Daily Change||0.0007|
|Today’s Daily Change %||0.08|
|Today’s Daily Opening||0.8678|
|20 Daily SMA||0.8517|
|50 Daily SMA||0.8488|
|100 Daily SMA||0.8503|
|200 Daily SMA||0.8445|
|Previous Daily High||0.8689|
|Previous Daily Minimum||0.8594|
|Previous Maximum Weekly||0.8677|
|Previous Weekly Minimum||0.8487|
|Monthly Prior Maximum||0.8653|
|Previous Monthly Minimum||0.834|
|Daily Fibonacci 38.2%||0.8653|
|Daily Fibonacci 61.8%||0.863|
|Daily Pivot Point S1||0.8618|
|Daily Pivot Point S2||0.8559|
|Daily Pivot Point S3||0.8524|
|Daily Pivot Point R1||0.8713|
|Daily Pivot Point R2||0.8748|
|Daily Pivot Point R3||0.8808|
Source: Fx Street