EUR/GBP remains confined in a familiar range, moves little after UK inflation data


  • EUR/GBP gains some positive traction on Wednesday, albeit lacks follow-through.
  • The immediate market reaction to the softer UK inflation figures fade rather quickly.
  • Traders keenly await the BoE meeting on Thursday before placing directional bets.

The EUR/GBP cross attracts some buyers on Wednesday and jumps to a fresh daily peak, around the 0.8555-0.8560 region after the release of the UK consumer inflation figures. Spot prices, however, lack follow-through and remain confined in a familiar trading band held since the beginning of the current month.

The UK Office for National Statistics (ONS) reported that the headline CPI rose 0.6% in February vs. a 0.6% fall recorded in the previous month and consensus estimates. Meanwhile, the yearly rate decelerated more than expected, from 4.0% in January to 3.4% during the reported month – marking its lowest level since September 2021.

Adding to this, the Core CPI fall from the 5.1% YoY rate to 4.5% in February, also missing expectations. This comes on top of a technical recession in the UK during the fourth quarter and raises bets for an early rate cut by the Bank of England (BoE), which, in turn, undermines the British Pound (GBP) and provides a modest lift to the EUR/GBP cross.

The UK inflation, however, is still much above the BoE’s 2.0% target, which, in turn, helps limit losses for the GBP. The shared currency, on the other hand, remains depressed in the wake of expectations that the European Central Bank (ECB) may start cutting interest rates in June. This further contributes to capping gains for the EUR/GBP cross.

Moreover, traders seem reluctant to place aggressive directional bets and prefer to wait on the sidelines ahead of the BoE policy meeting on Thursday. Hence, it will be prudent to wait for a sustained breakout through the short-term trading range before positioning for an extension of the recent goodish rebound from the 0.8500 psychological mark.

EUR/GBP

Overview
Today last price 0.8549
Today Daily Change 0.0008
Today Daily Change % 0.09
Today daily open 0.8541
 
Trends
Daily SMA20 0.8547
Daily SMA50 0.8552
Daily SMA100 0.8605
Daily SMA200 0.8608
 
Levels
Previous Daily High 0.8556
Previous Daily Low 0.8532
Previous Weekly High 0.856
Previous Weekly Low 0.8504
Previous Monthly High 0.8578
Previous Monthly Low 0.8498
Daily Fibonacci 38.2% 0.8547
Daily Fibonacci 61.8% 0.8542
Daily Pivot Point S1 0.853
Daily Pivot Point S2 0.852
Daily Pivot Point S3 0.8507
Daily Pivot Point R1 0.8554
Daily Pivot Point R2 0.8567
Daily Pivot Point R3 0.8578

 

 

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