EUR/GBP continues to cycle near 0.8560 ahead of Thursday's central bank doubleheader
- EUR/GBP pinned into a right midrange after November's hard selloff.
- The midweek sees a doubleheader from the BoE and the ECB.
- Dual rate holds to see markets focusing on press statements, investors to weigh degrees of hawkishness.
The EUR/GBP pair is testing the low end but still trapped firmly within near-term consolidation as the Euro (EUR) struggles to find meaningful momentum against the Pound Sterling in either direction.
The EUR/GBP is down a tenth of a percent in Monday action after briefly setting a thirteen-week low of 0.8549 earlier in the day.
Monday is a thin start to the trading week, but Tuesday will kick things off with an update to UK labor figures. UK Claimant Count Change in November is expected to show a slight increase from 17.8K to 20.3K, with the ILO 3-month Unemployment Rate for the quarter into October expected to hold steady at 4.2%.
Markets gearing up for a full docket of central bank data in the back half of the week
Wednesday will see mid-tier Industrial Production data from both the UK and the Eurozone, before giving way to Thursday's central bank double feature with both the Bank of England (BoE) and the European Central Bank (ECB) delivering their final interest rate calls of 2023.
Both central banks are expected to hold flat with the BoE sticking to 5.25% and the ECB's Main Refinancing Operations Rate firmly planted at 4.5%.
With the back half of the week roped off for central bank releases, flat forecasts will see markets chewing through respective outlook releases to weigh which bank is more hawkish.
EUR/GBP Technical Outlook
With the EUR/GBP steeply off November's high of 0.8765, down almost two and a half percent from peak-to-trough over the last five weeks, the pair is firmly pinned into the floorboards and testing into lows last seen in early September.
Near-term consolidation has the pair pinned just south of the 0.8580 level, with bullish tests getting consistently rejected but bearish momentum constrained above 0.8560.
The 200-day Simple Moving Average (SMA) is drifting down into the 0.8660 region, but with recent price action deflating the Euro against the Pound Sterling, the long-term moving average still remains well above current bids, putting a firm ceiling on long-term potential moves, but seeing little interaction with the pair in the near-term.
EUR/GBP Daily Chart
EUR/GBP Technical Levels
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.
