EUR/GBP pares BOE-led moves around 0.8950, German inflation, energy crisis in the spotlight

EUR/GBP picks up bids to reverse the post-BOE pullback.
Hawkish ECB jostled with the BOE’s bond-buying plan but failed to recall the bears.
Looming economic fears for the UK join hawkish ECBspeak to keep buyers hopeful.
German inflation may allow traders to witness further upside with firmer HICP numbers.

Anil Panchal FXStreet

EUR/GBP prints mild gains around 0.8950 during Thursday’s Asian session, after a volatile day that ended on a positive note.

The cross-currency pair’s latest gains could be linked to the regional currency’s comparative strength considering the hawkish comments from the European Central Bank (ECB). However, softer yields and hopes of the UK’s extra efforts to restrict trader confidence could challenge the pair bears.

That said, the Bank of England (BOE) announced a bond-buying program to defend the British Pound (GBP) on Wednesday. The details suggest that the BOE will buy bonds with a maturity of over 20 years and up to 5 billion sterling worth per auction initially. On the other hand, ECB President Christine Lagarde reiterated on Wednesday that they would continue to raise rates in the next several meetings, as reported by Reuters. Several other ECB Governing Council members, namely Olli Rehn, Peter Kazimir, and Robert Holzmann, openly favored a 0.75% rate hike in the next meeting.

Elsewhere, the US 10-year Treasury bond yields slumped the most in six months and allowed equities to consolidate recent losses, propelling the EUR and drowning the US dollar.

Looking forward, preliminary readings of Germany’s Harmonized Index of Consumer Prices (HICP) for September, expected 10% YoY versus 8.8% prior, will be essential to watch for fresh impulse. Also important will be the ECBSpeak and the comments from various BOE policymakers. Above all, risk catalysts are crucial to determine short-term EUR/GBP moves.

Considering the less likely immediate end of the UK’s financial problems, the EUR/GBP prices are likely to remain firmer and can rise further if the Germany data offers a positive surprise.

Technical analysis

A three-day-old bullish triangle restricts immediate EUR/GBP moves between 0.9030 and 0.8850.

Additional important levels

Overview
Today last price	0.8953
Today Daily Change	0.0015
Today Daily Change %	0.17%
Today daily open	0.8938

Trends
Daily SMA20	0.8725
Daily SMA50	0.8558
Daily SMA100	0.8547
Daily SMA200	0.8462

Levels
Previous Daily High	0.9004
Previous Daily Low	0.8897
Previous Weekly High	0.8937
Previous Weekly Low	0.8692
Previous Monthly High	0.8653
Previous Monthly Low	0.834
Daily Fibonacci 38.2%	0.8938
Daily Fibonacci 61.8%	0.8963
Daily Pivot Point S1	0.8888
Daily Pivot Point S2	0.8839
Daily Pivot Point S3	0.8781
Daily Pivot Point R1	0.8996
Daily Pivot Point R2	0.9054
Daily Pivot Point R3	0.9104

Author

Anil Panchal

FXStreet

Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.

AUD/USD stays weak above 0.6900 after China’s trade data

AUD/USD struggles to capitalize on the previous day’s recovery and stays defensive on the 0.6900 level following the narrowing of trade surplus in China. Increased December Fed rate hike bets allows the US Dollar to pause its decline and weigh on the pair. US CPI data is next of note for the major.

USD/JPY retakes 158.00 on weak Japanese data; focus shifts to US CPI

USD/JPY attracts some dip-buyers and retakes 158.00 in the Asian session on Tuesday as a fall in Japan’s Household Spending offsets hawkish BoJ Summary of Opinions, undermining the Japanese Yen. Moreover, Fed hike bets support the safe-haven US Dollar and the currency pair. The market focus now shifts to the release of the crucial US CPI report.

Gold sticks to modest losses amid Fed hike bets; holds above $4,100 ahead of US CPI

Gold meets fresh supply, eroding a part of the previous day's strong gains to the $4,150 resistance zone, albeit it holds above the $4,100 mark heading into the European session. Firming US Federal Reserve rate-hike expectations turn out to be a key factor driving flows away from the non-yielding bullion. Meanwhile, the US Dollar struggles to lure buyers amid mixed signals regarding the state of diplomatic talks between the US and Iran, offering some support to the commodity as traders seem hesitant ahead of US consumer inflation figures.

Bitcoin hits lowest weekly close since August as short-term holders slip into losses

Bitcoin fell below $75,000 on Tuesday, after recording its lowest weekly close since August as selling pressure pushed recent buyers into losses.

This weeks’ two big inflation reports will offer perspective

Payrolls on Friday surprised with a big gain, 165,000 new jobs rather than the 65,000 forecast. Also the unemployment rate fell from 4.2% to 4.1% although average hourly earnings are up only 0.4% ($32.75). This weeks’ two big inflation reports will offer perspective. Tomorrow it’s CPI and on Friday, which is a Friday the 13th, it’s PPI.

Gold reclaimed $4,100. Tuesday’s CPI test decides if it holds

Gold (XAU/USD) starts the week on a positive note, reclaiming the $4,100 psychological level as the US Dollar (USD) retreats from its recent highs. The precious metal recovers from Friday's losses, although investors remain cautious ahead of Tuesday's US Consumer Price Index (CPI) report, which could determine the next direction for Bullion.