EUR/GBP drops to fresh 23-months lows near 0.8300

EUR/GBP broke to the downside and fell to 0.8312, reaching the lowest level since February 2020. It remains near the low, under pressure, looking at the 0.8300 area on the back of a stronger pound.

Data from UK boost GBP

Earlier on Wednesday, CPI data from the United Kingdom came in above expectations, with the annual rate reaching 5.4%, above the 5.1% of the previous month and also surpassing the 5.2% expected. The numbers helped anchor expectations about another rate hike from the Bank of England.

“WIRP now suggests that another hike February 3 is fully priced in, followed by hikes at every other meeting that would take the policy rate to 1.25% by year-end. Furthermore, the market now sees 40% odds of a fifth hike this year to 1.50”, said analysts at Brown Brothers Harriman.

Another week, another slide?

The cross is falling for the sevenths consecutive week. The following key level stands at 0.8300, and below, attention would turn to 0.8270/75 (2019 and 2020 lows). On the upside, the key resistance is seen at 0.8380. If the euro recovers above it would alleviate the bearish pressure.

Technical levels