EUR/GBP flat-lines around 0.8615 area, remains below one-week high set on Thursday

EUR/GBP struggles to capitalize on its modest intraday bounce from the 0.8600 mark.
The BoE’s less hawkish signals undermine the GBP and act as a tailwind for the cross.
Speculations that the ECB will soon pause its rate-hiking cycle caps gains for the Euro.

Haresh Menghani FXStreet

The EUR/GBP cross attracts fresh buying near the 0.8600 mark on Friday and stalls the overnight pullback from a nearly two-week high touched in the aftermath of the Bank of England (BoE) policy decision. Spot prices, however, struggle to capitalize on the modest intraday uptick, warranting some caution before positioning for an extension of this week's goodish bounce from mid-0.8500s.

The British Pound's (GBP) relative underperformance could be attributed to the less hawkish signals from the BoE on Thursday, saying that the current monetary policy stance is "restrictive". The markets took this as an indication that the tightening cycle may be nearing an end and scaled back expectations for the peak rate. The outlook continues to undermine the GBP and lends some support to the EUR/GBP cross.

Traders, meanwhile, seem reluctant to place bullish bets around the shared currency in the wake of growing speculations that the European Central Bank (ECB) might also pause its historic hiking campaign soon. In fact, Fitch Ratings, in its latest report released this Friday, said that falling Eurozone inflation puts ECB rates peak within sight. This, in turn, is seen acting as a headwind for the EUR/GBP cross.

The aforementioned fundamental backdrop makes it prudent to wait for strong follow-through buying before confirming that the recent corrective decline from the 0.8700 mark has run its course. Market participants now look to a scheduled speech by the BoE Chief Economist Huw Pill, which might influence the Sterling Pound and produce short-term opportunities around the EUR/GBP cross on the last day of the week.

Technical levels to watch

EUR/GBP

Overview
Today last price	0.8615
Today Daily Change	-0.0001
Today Daily Change %	-0.01
Today daily open	0.8616

Trends
Daily SMA20	0.8589
Daily SMA50	0.8589
Daily SMA100	0.868
Daily SMA200	0.8725

Levels
Previous Daily High	0.8656
Previous Daily Low	0.8596
Previous Weekly High	0.8663
Previous Weekly Low	0.8544
Previous Monthly High	0.8701
Previous Monthly Low	0.8504
Daily Fibonacci 38.2%	0.8633
Daily Fibonacci 61.8%	0.8619
Daily Pivot Point S1	0.8589
Daily Pivot Point S2	0.8563
Daily Pivot Point S3	0.853
Daily Pivot Point R1	0.8649
Daily Pivot Point R2	0.8682
Daily Pivot Point R3	0.8708

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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