- GBP on the up as UK data impresses traders.
- The next data in line will be Retail Sales as traders look to the BoE's net move.
EUR/GBP is trading at 0.8537 at the time of writing, down 0.14% on the day and between a low of 0.8528 and a high of 0.8562. The price is below the prior day's close and has carved out dynamic support and resistance in an hourly time-frame perspective.
Meanwhile, the pound was the main focus of the cross this week so far. Sterling hit a new 5-week high against the dollar and a 3-week high to the euro on Tuesday, supported by labour market data that showed the total number of payrolled employees in Britain has climbed to pre-pandemic levels.
UK data in focus for EUR/GBP
UK employers added a record 241,000 staff to their payrolls last month. This means the total number of payrolled employees is just above the level they were before the initial COVID-19 lockdown last year. Investors have cheered the prospects for Britain's job market as the government phases out its furlough support programme, which will finish on Sept. 30.
Inflation data was the next catalyst ahead of Retail Sales data. British inflation hit a more than nine-year high last month, lifting prospects that the Bank of England could act sooner to hike rates.
''Consumer prices in Britain rose by 3.2% in annual terms last month. This was the biggest monthly jump in the annual rate in at least 24 years, largely due to a one-off boost reflecting the "Eat Out to Help Out" scheme that pushed down restaurant meal prices last year,'' Reuters reported.
Economists and the Bank of England expect inflation to rise sharply this year and hit a peak of 4% which means the central bank could be on course to tighten its monetary policy quicker than the European Central Bank or the US Federal Reserve. A Reuters poll found that investors believed the BoE will raise borrowing costs by the end of 2022.
Eyes on Retail Sales
The next focus for GBP will be tomorrow’s release of August Retail Sales.
''This is expected to bounce by 0.8% m/m after the -2.4% m/m plunge registered in July,'' analysts at Rabobank explained.
''That number prompted speculation that much of the lockdown related pent up demand in the UK has run its course. Tomorrow’s data will likely be key in setting that tone ahead of the September 23 BoE policy meeting.''
EUR/GBP technical analysis
EUR/GBP is on the verge of a downside breakout of the dynamic trendline support following a double top and a 50% mean reversion of the prior bearish impulse.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD holds onto gains near 1.0800 Premium
EUR/USD reached its highest level in two weeks at 1.0786 on Thursday, boosted by a weaker US Dollar across the board. The Greenback came under pressure after weak employment data. The pair remains above 1.0750 and is looking at 1.0800.
GBP/USD posts highest close in a month above 1.2550
GBP/USD gained more than a hundred pips on Thursday on the back of a weaker US Dollar, which was hit by weak US employment data. An improvement in risk sentiment also helped the Pound. EUR/GBP posted its lowest daily close since December.
Gold: XAU/USD pressures highs around $1,970 Premium
XAU/USD posted a nice comeback after bottoming at $1,939.66 a troy ounce on Thursday, a fresh weekly low. The US Dollar traded with a soft tone since the beginning of the day but turned frankly negative within American trading hours.
Cardano, Solana TVLs hold up despite SEC security label
The US Securities and Exchange Commission (SEC) classified several tokens as securities in its recent lawsuits against leading crypto exchange platforms Binance and Coinbase.
MULN still bottomless, slide reaches $0.50
Mullen Automotive (MULN) stock is trading at $0.5050 on Thursday pre-market trading at the time of writing, which would set a new all-time when Wall Street opens its session.