- EUR/GBP prepares to confirm a bullish breakout as the British pound retreats.
- With the ECB’s latest interest rate decision in the rearview mirror, attention turns to the Bank of England’s next rate hike.
- We will cap the week with EU and UK PMI data.
The pair EUR/GBP has started the week on the rise, decisively surpassing the 0.8600 area and extending higher as the Bank of England meeting approaches.
Sterling bulls need to survive Wednesday’s inflation numbers ahead of Bank of England interest rate decision
The BoE is expected to raise benchmark interest rates by 25 basis points to 5.5% on Thursday, but markets will position themselves ahead of time as inflation figures for the British economy will be published on Wednesday.
The UK Consumer Price Index (CPI) will hit the markets at 06:00 on Wednesday, with the headline inflation data for August expected to register a rebound to 0.7%, compared to the previous decline in the -0.4%.
On Thursday, the Bank of England will raise interest rates again as the British central bank struggles to get a firm grip on inflation, with prices continuing to rise despite already high interest rates , threaten to collapse the British economy.
The European Central Bank’s (ECB) rate hike last week hit the euro hard after ECB President Christine Lagarde signaled that this looks like the end of the ECB’s rate hike cycle. Investors will now look to the BOE’s next publication to reposition the EUR/GBP exchange rate.
Later in the week, both the Euro and the British Pound will release the Purchasing Managers’ Index (PMI) numbers. The outlook for EU pan-continental activity is expected to decline slightly to 46.3 from 46.7 previously. As for the UK, purchasing managers’ expectations are expected to remain stable at 48.6.
EUR/GBP Technical Outlook
The Euro-British pair is rising on Monday, hitting six-week highs, while the pound falters ahead of the week’s central bank presentation.
EUR/GBP has broken north of a descending trend line from the mid-July high at 0.8700, and continuation of bullish momentum will be limited by the 200-day SMA which currently sits just above of 0.8710.
Despite Monday’s bullish breakout, prices remain relatively consolidated for the EUR/GBP pair, and market sentiment will be quick to pull the plug and reverse direction if bullish momentum falters too strongly from 0.8660, and the which has limited the pair recently.
EUR/GBP Daily Chart
EUR/GBP technical levels
|Latest price today||0.8632|
|Today I change daily||0.0028|
|Today’s daily variation||0.33|
|Today’s daily opening||0.8604|
|Previous daily high||0.8616|
|Previous daily low||0.8569|
|Previous weekly high||0.8631|
|Previous weekly low||0.8558|
|Previous Monthly High||0.8669|
|Previous monthly low||0.8493|
|Daily Fibonacci 38.2||0.8598|
|Fibonacci 61.8% daily||0.8587|
|Daily Pivot Point S1||0.8577|
|Daily Pivot Point S2||0.855|
|Daily Pivot Point S3||0.8531|
|Daily Pivot Point R1||0.8624|
|Daily Pivot Point R2||0.8643|
|Daily Pivot Point R3||0.867|
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.