EUR/GBP stuck in a range around mid-0.8600s ahead of German CPI, BoE’s Bailey


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  • EUR/GBP lacks any firm intraday direction and remains confined in a narrow trading band.
  • Talks for more aggressive rate hikes by the ECB underpin the Euro and lend some support.
  • Traders look to the flash German CPI and BoE Governor Bailey’s speech for some impetus.

The EUR/GBP cross struggles to capitalize on a two-day-old recovery move from the 0.8575-0.8570 support zone and oscillates in a narrow trading band on Tuesday. The cross, however, manages to hold above the 100-day Simple Moving Average (SMA) and trades around mid-0.8600s during the early European session.

The downside for the EUR/GBP cross remains cushioned in the wake of more hawkish comments by European Central Bank (ECB) policymakers recently, which point to a series of interest rate hikes ahead. In fact, ECB President Christine Lagarde said on Monday that Eurozone inflation has not peaked yet. Adding to this, Dutch central bank chief Klaas Knot noted that the risk of doing too little is clearly more pronounced than doing too much. This, along with the emergence of fresh US Dollar selling, continues to underpin the shared currency and offers support to the cross.

Adding to this, a bleak outlook for the UK economy contributes to the British Pound's underperformance and acts as a tailwind for the EUR/GBP cross. This, however, is offset by expectations that the Bank of England (BoE) will continue to raise borrowing costs to combat stubbornly high inflation. The mixed fundamental backdrop, in turn, is holding back traders from placing aggressive directional bets and capping the upside for the EUR/GBP cross. Market participants also seem reluctant ahead of the flash German CPI figures and BoE Governor Andrew Bailey's scheduled speech on Tuesday.

From a technical perspective, repeated failures to find bearish acceptance below the 100 DMA warrants some caution for bearish traders. That said, the EUR/GBP pair's inability to gain any meaningful traction makes it prudent to wait for strong follow-through buying before confirming a near-term bottom and positioning for further gains.

Technical levels to watch

EUR/GBP

Overview
Today last price 0.8644
Today Daily Change -0.0006
Today Daily Change % -0.07
Today daily open 0.865
 
Trends
Daily SMA20 0.8694
Daily SMA50 0.8726
Daily SMA100 0.862
Daily SMA200 0.8535
 
Levels
Previous Daily High 0.8676
Previous Daily Low 0.8587
Previous Weekly High 0.8701
Previous Weekly Low 0.8572
Previous Monthly High 0.8867
Previous Monthly Low 0.8572
Daily Fibonacci 38.2% 0.8642
Daily Fibonacci 61.8% 0.8621
Daily Pivot Point S1 0.86
Daily Pivot Point S2 0.8549
Daily Pivot Point S3 0.8511
Daily Pivot Point R1 0.8689
Daily Pivot Point R2 0.8726
Daily Pivot Point R3 0.8777

 

 

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