EUR/GBP surrenders BoE rate cut-led gains to 5-month tops

EUR/GBP witnessed a dramatic intraday turnaround amid a pickup in the GBP demand.
Investors now look forward to the BoE presser and the UK macro data for fresh impetus.
The UK annual budget should play a key role in determining the pair’s near-term direction.

Haresh Menghani FXStreet

The EUR/GBP cross faded an intraday bullish spike to five-month tops and dropped to the lower end of its daily trading range, around the 0.8740 region.

The British pound weakened across the board and pushed the cross to an intraday high level of 0.8848 after the Bank of England's surprise move to cut interest rates by 50 bps to 0.25%. The momentum, however, fizzled out rather quickly and the cross witnessed a dramatic intraday turnaround, falling over 100 pips from the daily swing highs.

The fact that the rate cut was announced just ahead of the UK annual budget was seen as a strong signal for the upcoming fiscal measures to support the UK economy. The coordinated effort seemed to have boosted investors’ confidence and turned out to be one of the key factors that led to a sudden pickup in the demand for the sterling.

Meanwhile, a mildly positive tone surrounding the shared currency might help limit deeper losses ahead of the BoE press conference and a slew of important UK macro data. This will be followed by the UK Chancellor of the Exchequer Rishi Sunak's first budget, which should play a key role in influencing the GBP price dynamics and provide a fresh impetus.

Technical levels to watch

EUR/GBP

Overview
Today last price	0.8748
Today Daily Change	0.0010
Today Daily Change %	0.11
Today daily open	0.8738

Trends
Daily SMA20	0.85
Daily SMA50	0.8491
Daily SMA100	0.8517
Daily SMA200	0.8741

Levels
Previous Daily High	0.8782
Previous Daily Low	0.8681
Previous Weekly High	0.8746
Previous Weekly Low	0.8594
Previous Monthly High	0.8644
Previous Monthly Low	0.8282
Daily Fibonacci 38.2%	0.8743
Daily Fibonacci 61.8%	0.8719
Daily Pivot Point S1	0.8685
Daily Pivot Point S2	0.8633
Daily Pivot Point S3	0.8585
Daily Pivot Point R1	0.8786
Daily Pivot Point R2	0.8834
Daily Pivot Point R3	0.8886

Author

Haresh Menghani

FXStreet

Haresh Menghani is a detail-oriented professional with 10+ years of extensive experience in analysing the global financial markets.

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