- EUR/GBP recovered the 20-day SMA rising near 0.8630, seeing nearly 0.40% gains.
- EUR is one of Wednesday’s top performers amongst its rivals.
- No relevant data will be released for either economy. Tightening expectations of BoE and ECB to dictate the pace.
At the middle of the week, the EUR/GBP recovered ground and jumped above the 20-day Simple Moving Average (SMA) of 0.8600. The EUR trades with gains against the USD, CHF, JPY, and AUD on higher German yields while the Pound trades soft.
On a quiet week, tightening expectations dictate the pace of the EUR/GBP cross, and rising German yields are pushing the pair higher. The 10-year bond yield rose to 2.47%, while the 2-year yield stands at 3.09% and the 5-year yielding 2.53%, respectively, making the EUR gain interest against its rivals. The focus now shifts to next week’s Q2 Gross Domestic Product (GDP) and inflation data from July from the European Union, which will help investors to model the next data-dependant European Central Bank (ECB) decision.
On the Pound’s side, GDP data on Friday will be key. The Bank of England reported in it last monetary policy statement that it no longer expects a recession, so the economic outlook in the UK will have an impact on the bets of market participants on the next BoE’s decision. As for now, they still bet, according to the World Interest Rate Possibilities (WIRP), a terminal rate of 5.75%, meaning an additional 50 basis point tightening for the rest of this cycle.
EUR/GBP Levels to watch
The daily chart suggests that the technical outlook is neutral to bullish for the short term as the bulls gain momentum, but buyers still have some work to do. The Relative Strength Index (RSI) has a positive slope in the bullish territory just above its midline, while the Moving Average Convergence (MACD) histogram displays increasing green bars. On the other hand, the pair is above the 20-day Simple Moving Average (SMA) but below the 100 and 200-day SMAs, indicating that there is still some light for the bulls but that the bears have the upperhand on the bigger picture.
Support levels: 0.8600 (20-day SMA), 0.8570, 0.8530.
Resistance levels: 0.8670 (100-day SMA), 0.8680, 0.8700
EUR/GBP Daily chart
-638272022139112620.png)
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
AUD/USD dips below 0.6600 following RBA’s decision
The Australian Dollar registered losses of around 0.42% against the US Dollar on Tuesday, following the RBA's monetary policy decision to keep rates unchanged. However, it was perceived as a dovish decision. As Wednesday's Asian session began, the AUD/USD trades near 0.6591.
EUR/USD edges lower to near 1.0750 after hawkish remarks from a Fed official
EUR/USD extends its losses for the second successive session, trading around 1.0750 during the Asian session on Wednesday. The US Dollar gains ground due to the expectations of the Federal Reserve’s prolonging higher interest rates.
Gold wanes as US Dollar soars, unfazed by lower US yields
Gold price slipped during the North American session, dropping around 0.4% amid a strong US Dollar and falling US Treasury bond yields. A scarce economic docket in the United States would keep investors focused on Federal Reserve officials during the week after last Friday’s US employment report.
FTX files consensus-based plan of reorganization, awaits bankruptcy court approval
FTX has filed a consensus-based plan for its reorganization, coming almost two years after the now defunct FTX filed for Chapter 11 Bankruptcy Protection in the District of Delaware.
Living vicariously through rate cut expectations
U.S. stock indexes made gains on Tuesday as concerns about an overheating U.S. economy ease, particularly with incoming economic reports showing data surprises at their most negative levels since February of last year.