- The EUR/GBP retreated on Friday and eroded some of the gains that followed the ECB.
- Expectations of BoE rate hikes proved to be a key factor supporting GBP.
- Eurozone: inflation and growth show better-than-expected figures.
EUR/GBP remained weaker in the European session and despite the Eurozone economic data. The pair fell to 0.8445, and was unable to regain significant ground afterwards.
The euro failed to hold after the European Central Bank meeting
The euro failed to hold after reaching two-week highs following the European Central Bank meeting. Market expectations that the Bank of England (BoE) will hike rates at its next policy meeting support the pound. UK Finance Minister Rishi Sunak’s upbeat economic assessment during the budget presentation on Wednesday fueled speculation.
Chirstine Lagarde acknowledged stronger-than-expected inflationary pressures on Thursday
Chirstine Lagarde, on the other hand, acknowledged stronger inflationary pressures than expected, but downplayed the need to raise interest rates. The ECB left everything unchanged, so that decisions on the purchase program will be made in December.
Eurostat estimates released Friday show that Eurozone headline CPI reached a 13-year high of 4.1% this month. The reading was a notable acceleration from the 3.4% in September. And it was also higher than the market consensus increase of 3.7%. In addition, the reading exceeded the ECB’s 2% target. This and a better-than-expected reading for the Eurozone’s third-quarter GDP overshadowed a slight disappointment in German growth.
From a technical perspective, the recent move beyond the upper limit of more than a week’s trading range suggests that EUR/GBP may have bottomed and favors bullish traders. Although rejection above 0.8460 should be treated with caution. At 0.8435 is the next support and then 0.8420.
Today’s last price 0.8459
Daily change -0.0013
Today’s daily % change -0.15
Daily open 0.8472
Daily SMA50 0.8531
Daily SMA200 0.8598