EUR/GBP rises as markets gear up for a hike on Thursday by the ECB

EUR/GBP closed above 0.8600 and saw 0.20% gains.
A Reuters report indicated that the ECB will hike rates on Thursday on higher-than-expected inflation forecasts.

Patricio Martín FXStreet

On Wednesday, the EUR/GBP closed above 0.8600, and the EUR gained ground over the GBP as investors are preparing for an announcement of a 25 basis point (bps) hike by the European Central Bank (ECB) on Thursday.

In line with that, Reuters reported that the European Central Bank (ECB) foresees eurozone inflation remaining above 3% next year, exceeding the previous 2% projection, which would justify a tenth consecutive interest rate hike at its upcoming meeting on Thursday. In the meantime, market expectations are divided between the bank maintaining current rates and a 25 basis point increase due to concerns about high inflation and looming recession fears.

Despite this projection strengthening the case for a hike, analysts still believe that the decision will be a close call.

EUR/GBP Levels to watch

The daily chart analysis indicates a neutral to bullish outlook for EUR/GBP as the bulls show signs of resurgence but face challenges ahead. Having turned flat in positive territory, the Relative Strength Index (RSI) suggests a potential market equilibrium with balanced buying and selling pressure, while the Moving Average Convergence (MACD) histogram exhibits increasing green bars. Furthermore, the pair is above the 20-day Simple Moving Average (SMA) but below the 100- and 200-day SMAs, indicating that the bulls aren't done yet and that the outlook is still positive for the short term.

Support levels: 0.8590, 0.8567 (20-day SMA), 0.8550.

Resistance levels: 0.8615 (100-day SMA), 0.8630, 0.8650.

EUR/GBP Daily Chart

EUR/GBP

Overview
Today last price	0.8609
Today Daily Change	0.0015
Today Daily Change %	0.17
Today daily open	0.8594

Trends
Daily SMA20	0.8563
Daily SMA50	0.8581
Daily SMA100	0.862
Daily SMA200	0.8712

Levels
Previous Daily High	0.8594
Previous Daily Low	0.8558
Previous Weekly High	0.8601
Previous Weekly Low	0.8524
Previous Monthly High	0.8669
Previous Monthly Low	0.8493
Daily Fibonacci 38.2%	0.8581
Daily Fibonacci 61.8%	0.8572
Daily Pivot Point S1	0.857
Daily Pivot Point S2	0.8546
Daily Pivot Point S3	0.8534
Daily Pivot Point R1	0.8606
Daily Pivot Point R2	0.8619
Daily Pivot Point R3	0.8643

Author

Patricio Martín

FXStreet

Patricio is an economist from Argentina passionate about global finance and understanding the daily movements of the markets.

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