EUR/GBP advances towards 0.8900 as focus shifts to ECB Lagarde’s speech/UK data

EUR/GBP is aiming towards 0.8900 as BOE’s liquidity infusion plan has violated the price stability agenda.
The BOE has temporarily paused corporate bonds sale and is purchasing index-linked gilts.
On Wednesday, ECB Lagarde’s speech and UK data will be in focus.

Sagar Dua FXStreet

The EUR/GBP pair is juggling around 0.8850 in the Tokyo session after a sheer upside move. Earlier, the asset delivered a north-side break of the week-long consolidation formed in a range of 0.8726-0.8818. The upside break was logged after the Bank of England (BOE) announced a surprise purchase of index-linked gilts up to GBP5 bln. Simultaneously, the BOE announced a temporary pause in corporate bonds sale this week.

The announcement of liquidity infusion by purchasing index-linked gilts triggered the violation of the agenda of bringing price stability. BOE policymakers are putting blood and sweat to curtail the mounting price pressures and the infusion of fresh liquidity has unnerved the market participants.

The pound bulls are also punished due to vulnerable jobless claims data. As per the UK Office of National Statistics, the number of people applying for jobless claims has increased by 25.5k vs. the consensus of a decline of 11.4k. While the Unemployment Rate has slipped to 3.5% against the projections and the prior release of 3.6%. A better-than-projected improvement in Average Earnings data has delighted the households as they will be better position to offset the impact of higher payouts.

Going forward, investors will keep an eye on the UK Industrial and Manufacturing Production data, which are expected to decline from their prior releases.

Meanwhile, the hawkish commentary from European Central Bank (ECB) Chief Economist Philip Lane has also strengthened the shared currency bulls. ECB policymaker stated that “the evidence suggests that the euro area is not experiencing a broad-based de-anchoring of medium-term inflation expectations”. This may compel the ECB to keep tightening policy further.

On Wednesday, the speech from ECB President Christine Lagarde will remain in focus. ECB’s Lagarde is expected to provide guidance about the likely monetary policy action by the central bank ahead. Apart from that, the consequences of escalated Russia-Ukraine war situation will be keenly watched.

EUR/GBP

Overview
Today last price	0.8846
Today Daily Change	-0.0005
Today Daily Change %	-0.06
Today daily open	0.8851

Trends
Daily SMA20	0.8791
Daily SMA50	0.8628
Daily SMA100	0.8576
Daily SMA200	0.848

Levels
Previous Daily High	0.886
Previous Daily Low	0.8725
Previous Weekly High	0.8831
Previous Weekly Low	0.8649
Previous Monthly High	0.9254
Previous Monthly Low	0.8566
Daily Fibonacci 38.2%	0.8809
Daily Fibonacci 61.8%	0.8777
Daily Pivot Point S1	0.8764
Daily Pivot Point S2	0.8677
Daily Pivot Point S3	0.8629
Daily Pivot Point R1	0.8899
Daily Pivot Point R2	0.8947
Daily Pivot Point R3	0.9034

Author

Sagar Dua

FXStreet

Sagar Dua is associated with the financial markets from his college days. Along with pursuing post-graduation in Commerce in 2014, he started his markets training with chart analysis.

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