EUR/GBP holds above 0.8650, moves shortly after ECB hikes rates by 75bps

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  • 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.

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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.

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Technical levels

EUR/GBP

Panorama
Last Price Today 0.8685
Today’s Daily Change 0.0007
Today’s Daily Change % 0.08
Today’s Daily Opening 0.8678
Trends
20 Daily SMA 0.8517
50 Daily SMA 0.8488
100 Daily SMA 0.8503
200 Daily SMA 0.8445
levels
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

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