EUR/GBP churns near 0.8600 as central banks dominate headlines

EUR/GBP jostled after BoE rate cote steps towards cuts.
Officials from both central banks insist progress is being made.
Friday to wrap up the trading week with UK GDP.

Joshua Gibson FXStreet

EUR/USD cycled within familiar levels on Thursday as the pair’s respective central banks compete to reaffirm markets that progress is being made on inflation, and the path towards rate cuts is coming, but not quite yet. The Bank of England (BoE) took one step closer to delivering rate cuts with a 7-to-2 vote on holding rates steady, while talking points from multiple European Central Bank (ECB) officials reiterated the message that inflation will eventually return to ECB target levels.

Of the nine voting members of the BoE’s Monetary Policy Committee (MPC), all but two voted to keep rates on hold for another meeting. Markets expected an 8-to-1 vote with Dr. Swati Dhingra broadly expected to be the lone holdout for a single quarter-point cut. Deputy Governor for Markets and Banking Sir David Ramsden joined Dr. Dhingra in voting for a 25-basis-point rate trim, bringing the BoE one step closer to pushing down interest rates.

Friday brings a fresh print of UK Gross Domestic Product (GDP), which is expected to return to growth after the previous month’s contraction. Q1 UK GDP is forecast to print at 0.4% QoQ, compared to the previous quarter’s -0.3%.

EUR/GBP technical outlook

EUR/GBP remains hung up on intraday technical congestion near 0.8600 as 0.8620 threatens to solidify into technical resistance. The pair has been drifting higher, bolstered by the rising 200-hour Exponential Moving Average (EMA) at 0.8582.

Daily candlesticks show EUR/GBP scrambling to retake the last swing high above 0.8640 as the pair grapples with keeping aloft above the 200-day EMA at 0.8599. The EUR/GBP has traded higher for all but one of the last eight consecutive days, but a bearish turnaround from here will chalk in another lower high and send the pair back down to long-term consolidation near the 0.8500 handle.

EUR/GBP hourly chart

EUR/GBP daily chart

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

GBP/USD hits fresh three-month highs above 1.3550

GBP/USD stretches north and refreshes three-month highs above 1.3500 in the European session on Monday. The prevalent US Dollar selling bias favors bullish traders and suggests that the path of least resistance for the pair remains to the upside.

EUR/USD extends gains above 1.1600 on USD weakness

EUR/USD extends its advance above 1.1600 in European trading hours on Monday. The US Dollar resumes its downside amid weaker-than-expected US economic data, shifting Fed expectations and fading geopolitical risk premium.

Gold sticks to gains near $4,400 as USD slumps to two-month low

Gold maintains its bullish tone through the first half of the European session and currently trades around $4,400, up for the second straight day. The commodity, however, remains below the highest level since June 5, touched last Thursday, amid a mixed fundamental backdrop.

Pepe defends a key support amid mixed retail demand

Pepe is up nearly 2% after a 10% decline last week, showing signs of a mild recovery, while broader crypto market risk appetite remains weak. PEPE derivatives data point to a mixed outlook, as Open Interest declines while funding rates turn positive. Technically, PEPE must hold above its $0.00000255 support floor to avoid a downside of over 10%.

Canada CPI expected to show rising inflation in July

Canada’s July Consumer Price Index (CPI) figures will be the focus of attention when published on Monday. Indeed, Statistics Canada data will provide markets with an update on price pressures following the Bank of Canada’s July 15 gathering, when officials kept the interest rate steady at 2.25%, broadly in line with the consensus among analysts.

Why is Crude Oil priced for a reopening the ships haven't made?

Fourteen vessels crossed the Strait of Hormuz on Tuesday. Before the war, the count ran near 120 a day. In the sessions since the waterway was publicly declared open, Brent has drifted back to $87 and West Texas Intermediate (WTI) to $81, both a little lower again on Wednesday, with daily momentum on each unwound from the top of its range in late July to the low twenties now.