EUR/GBP recovers from Monday dip, but still on the low side below 0.8680
- The EUR/GBP is struggling to hold its head above water as the Euro slips back.
- The ECB is holding steady on their policy stance, but warning that inflation may tick higher.
- An appearance by BoE Governor Bailey, EU HICP inflation on the docket later in the week.
The EUR/GBP saw another downside push on Monday, testing below 0.8660 before seeing a moderate rebound that sees the Euro (EUR) struggling to recover 0.8680 against the Pound Sterling (GBP).
The European Central Bank (ECB) is ramping up their market rhetoric in the run-up into Thursday's Eurozone Harmonized Index of Consumer Prices (HICP) inflation figures. Eurozone inflation is expected to tick slightly lower from 2.9% to 2.7% for the annualized period into November, but ECB President Christine Lagarde warned early Monday that the Eurozone could see slightly higher inflation figures in the coming months.
ECB’s Lagarde: Headline inflation may rise again slightly in the coming months
Wednesday will see another public outing by Bank of England (BoE) Governor Andrew Bailey, who will be delivering prepared remarks at an event celebrating the 50th anniversary of the London Foreign Exchange Joint Standing Committee. A question period is not expected, but the Governor's presence will still see investors keeping an eye out for comments from the BoE head regarding policy as it pertains to the FX markets.
EUR/GBP Technical Outlook
The Euro has been capped off by the 50-hour Simple Moving Average (SMA) against the Pound Sterling since backsliding from a near-term high of 0.8765 last week, and despite multiple bullish attempts at breaking the shortfall, the EUR/GBP is down a full percentage point from last week's peak.
With the EUR/GBP slipping back, the pair is currently challenging the 200-day SMA, while the 50-day SMA is in the process of confirming a bullish crossover of the longer moving average, and 0.8680 could prove to be a technical ceiling if selling pressure continues unabated.
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.
