EUR/GBP improves to near 0.8580 on expected hawkish stance by ECB

EUR/GBP extends gains as the ECB is expected to not adjust its monetary policy.
ECB President Christine Lagarde has shifted expectations for a rate cut to late summer.
The disappointing UK Retail Sales data has contributed pressure to undermining the Pound Sterling.

Akhtar Faruqui FXStreet

EUR/GBP extends its gains for the second successive session on Monday, trading higher near 0.8580 during the European trading hours. The EUR/GBP pair received upward support as the European Central Bank (ECB) is expected to not adjust its monetary policy in Thursday’s meeting.

ECB President Christine Lagarde has shifted expectations for a rate cut to late summer, citing caution due to higher inflation levels that exceed the central bank's target. The members of the European Central Bank Governing Council are exercising caution to avoid prematurely easing financial conditions.

The British Pound (GBP) faced challenges against the Euro (EUR) following the release of vulnerable Retail Sales data for December by the United Kingdom (UK) Office for National Statistics (ONS) on Friday. The month-over-month (MoM) UK Retail Sales registered a decline of 3.2%, contrasting with the previous increase of 1.4%. On a year-over-year basis, Retail Sales fell by 2.4%, compared to the previous growth of 0.2%.

The significant decline in UK Retail Sales signals deep economic challenges, accompanied by elevated price pressures. The outlook for the UK economy appears pessimistic, raising concerns about the possibility of a technical recession. In this context, policymakers at the Bank of England (BoE) face a challenging dilemma. This balancing act requires a careful approach from the BoE regarding potential rate cuts.

EUR/GBP: additional levels to watch

Overview
Today last price	0.8581
Today Daily Change	0.0004
Today Daily Change %	0.05
Today daily open	0.8577

Trends
Daily SMA20	0.8625
Daily SMA50	0.8639
Daily SMA100	0.8649
Daily SMA200	0.8642

Levels
Previous Daily High	0.8593
Previous Daily Low	0.8556
Previous Weekly High	0.862
Previous Weekly Low	0.8555
Previous Monthly High	0.8715
Previous Monthly Low	0.8549
Daily Fibonacci 38.2%	0.8579
Daily Fibonacci 61.8%	0.857
Daily Pivot Point S1	0.8558
Daily Pivot Point S2	0.8539
Daily Pivot Point S3	0.8521
Daily Pivot Point R1	0.8595
Daily Pivot Point R2	0.8612
Daily Pivot Point R3	0.8632

Author

Akhtar Faruqui

FXStreet

Akhtar Faruqui is a Forex Analyst based in New Delhi, India. With a keen eye for market trends and a passion for dissecting complex financial dynamics, he is dedicated to delivering accurate and insightful Forex news and analysis.

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