- The EUR/GBP pair traded between 0.8554 and 0.8521 and on Friday closed with a weekly loss of 0.50%.
- Falling UK yields made it difficult to bid for the British pound.
- Next week we will have to pay attention to the German inflation data and the British labor market.
On Friday, the pair EUR/GBP it traded at a loss, falling as low as 0.8521 and then settling around 0.8545. The calendars for the Eurozone and the United Kingdom offered nothing relevant, and the attention is focused on the data of the Consumer Price Index (CPI) from Germany and the labor market from the United Kingdom next week.
During the session, the pound weakened due to the fall in British yields. The 2-year yield, after jumping to multi-year highs on Thursday, fell more than 2% to 5.37%, while 5-year and 10-year rates also fell to 4.84% and 4.65%, respectively. .
The UK bond market could experience volatility next Tuesday when crucial labor market data is released. The Bank of England closely follows the evolution of the number of asylum seekers and average earnings when deciding its monetary policy. At the moment, markets are largely pricing in a 50 basis point (bp) hike for the August 3 meeting, followed by another 0.5% hike on September 21.
On the other hand, investors discount a rise of 25 basis points (bp) at the next meeting of the European Central Bank (ECB) in July, and another in September with a discount of almost 60%. That being said, next week’s German CPI figures will continue to shape expectations for the ECB’s next steps.
EUR/GBP Levels to Watch
According to the daily chart, despite the fact that the indicators have turned flat, the outlook for EUR/GBP is still leaning lower. The Relative Strength Index (RSI) remains neutral in negative territory, while the Moving Average Divergence (MACD) creates lower green bars, indicating fading bullish momentum.
Support levels: 0.8520, 0.8490 ,0.8450.
Resistance levels: 0.8560, 0.8571 (20-day SMA), 0.8595.
EUR/GBP Daily Chart
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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.
