- EUR/GBP rose to 0.8580, breaking above a key resistance level.
- Lower UK inflation data suppressed the British Pound during Wednesday’s session.
- Markets are strongly pricing in a BoE rate cut in September.
On Wednesday, the EUR/GBP pair rose towards 0.8580, with lower than expected inflation data in the UK weighing on the British Pound. This contrasts with Tuesday’s moves, when the Pound’s strength was lifted by more positive UK employment data, as lower inflation figures could lead to a more dovish Bank of England (BoE).
The UK Office for National Statistics reported that inflation in the UK, as measured by the Consumer Price Index (CPI), rose to 2.2% on an annual basis in July from 2% in June, below the market expectation of 2.3%. Similarly, core CPI growth slowed to 3.3% from 3.5% recorded in June. The initial market reaction to these figures resulted in diminished interest in the British Pound.
The BoE’s next policy meeting is on September 19, and the market is currently pricing in a nearly 45% chance of a rate cut.
EUR/GBP Technical Analysis
The EUR/GBP pair has been showing an overall bullish trend in the recent sessions. The RSI of the EUR/GBP pair is fluctuating around the mid-range values, indicating that the bulls are gaining strength and have more to go. The highest RSI was around 62, suggesting a slight overbought presence. The MACD is showing constant green bars, confirming the presence of buyers.
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.
