Euro steadies against Pound Sterling as traders await UK GDP verdict
- EUR/GBP trades flat within a tight range near the 0.8540 zone.
- The Bank of England's July hold showed a split Monetary Policy Committee, with three of nine members pushing for a hike.
- The next major data release for the GBP is due on Thursday, with the UK Gross Domestic Product report.
The Euro (EUR) steadies against the Pound Sterling (GBP) on Wednesday, with EUR/GBP trading flat near the 0.8540 zone after two consecutive declines. The Pound briefly hit a two-week high earlier in the day before retracing following the release of the German Consumer Price Index (CPI), which showed inflation remained sticky in July.
The Pound has held a firm undertone through the week, keeping the pair pinned below where it started, even as markets brace for a growth report that could challenge that strength either way.
The Bank of England (BoE) left its key rate unchanged at 3.75% at its early-July meeting, in line with expectations, but the vote was closer than the headline suggests. Three of the nine MPC members pushed for a 25 basis-point hike, pointing to inflation risks skewed to the upside on higher energy prices tied to the conflict in the Middle East.
On Thursday, the preliminary UK GDP will be the main catalyst for the cross. Economists expect growth of 0.4% QoQ in the three months to June, down from 0.6% in the first quarter, with the annual rate seen ticking up to 1.1% from 0.9% in March. A number in line with forecasts is unlikely to move Sterling much on its own, but a clear miss would be sharp
Short-term technical analysis:
On the 4-hour chart, EUR/GBP trades at 0.8540, keeping a bearish near-term tone as it holds beneath both the 20-period Simple Moving Average (SMA) at 0.8551 and the 100-period SMA at 0.8554. The pair is also capped by nearby horizontal barriers at 0.8541 and 0.8545, while the Relative Strength Index (RSI) around 39 remains below the neutral 50 mark, suggesting subdued bullish momentum and favoring further downside while these caps stay intact.
On the downside, initial support emerges at 0.8534, ahead of a lower horizontal floor at 0.8532, which together define the immediate demand area. On the topside, a recovery would first need to reclaim 0.8541, followed by 0.8545, before the focus could shift to the 20-period SMA at 0.8551 and then the 100-period SMA at 0.8554 as progressively stronger resistance levels.
(The technical analysis of this story was written with the help of an AI tool. Know more.)
Author
Agustin Wazne
FXStreet
Agustin Wazne joined FXStreet as a Junior News Editor, focusing on Commodities and covering Majors.
