Quotes

CFD Trading Rate Euro vs Great Britain Pound (EURGBP)

Bid
Ask
Change (%)
Date/Time (GMT 0)
Over the past 10 days
Date Rate Change

Related news

  • 07.02.2024 08:41
    EUR/GBP declines toward 0.8530 as ECB rate-cut bets deepen
    • EUR/GBP falls to near 0.8530 as soft Eurozone data deepen ECB rate-cut bets.
    • ECB Cos is confident about inflation declining towards the 2% target.
    • UK companies are becoming optimistic about BoE’s rate-cut prospects.

    The EUR/GBP pair falls sharply to near 0.8530 on December's downbeat German Industrial Production data. The industrial output of the world’s fourth largest economy was down at a sharp pace of 1.6% monthly, while market participants projected a decline of 0.6%. In November, the economic data was contracted by 0.2%.

    The Eurozone economy is underperforming due to labor market, consumer spending and manufacturing activities. And, now, downbeat Industrial Production data has added to indicators deepening chances of early rate cuts by the European Central Bank (ECB).

    Odds of an early rate cuts by the ECB stemmed after policymaker Pablo Hernandez de Cos said on Tuesday, "it is already very important for European citizens to know that we are confident the next move will be a cut.” In the commentary, ECB Cos showed confidence in inflation declining towards the 2% target.

    On the contrary, ECB executive board member Isabel Schnabel said in late Asian session on Wednesday that the last mile in bringing down inflation towards the 2% target will be the most difficult one. Schnabel warned that early rate cuts could flare up price pressures again.

    Meanwhile, the Pound Sterling performs better against the Euro as the economic prospects of the United Kingdom's economy are improving again. UK service sector and construction companies have become more optimistic about fading recession risks and rate cuts by the Bank of England (BoE) amid easing price pressures.

     

  • 06.02.2024 16:21
    EUR/GBP price analysis: Bull struggle to hold ground and give up the 20-day SMA
    • The EUR/GBP trades lower at 0.8540,with a 0.30% drop.
    • Declining RSI on the daily chart stands indicative of mounting selling pressure.
    • On a shorter four-hour chart span, flat indicators in negative territory after a sharp plunge during the European session.

    In Tuesday's session, the EUR/GBP pair was seen taking a dip to 0.8540, falling below the 20-day Simple Moving Average (SMA). The mix of hawkish US Federal Reserve bets, rising US Treasury yields and negative Eurozone Retail Sales figures from December, drove down the cross. Technically speaking, bears still dominate the daily chart while indicators flattened in negative territory on the four-hour chart.

    EUR/GBP levels to watch

    Evaluating the daily chart, the lingering presence of selling pressure is evident. This is mirrored through the Relative Strength Index (RSI), which is traced in a downward trajectory in negative territory which signals the persistent dominance of sellers. The Moving Average Convergence Divergence (MACD) exhibits stability with flat green bars, pointing towards a restrained bullish traction. Moreover, the pair’s position under the 20, 100, and 200-day Simple Moving Averages (SMAs) underlines the prevailing bearish trend on a broader scale. The fact that the bulls failed to consolidate above the 20-day SMA also speaks of a bearish bias.

    Shifting to the short-term technical outlook on the four-hour chart, it further underpins the bearish sentiment. The indicators are rather stale in the negative region, which were previously on a sharp descent during the European session. This combination of signals suggest that the cross may consolidate losses during the rest of the session but that the overall trend is still tilted to the downside.

    EUR/GBP daily chart

     

  • 06.02.2024 11:19
    EUR/GBP: Correction could extend towards 0.8455 and 0.8385 on failure to defend 0.8490 – SocGen

    EUR/GBP has experienced a deeper down move after giving up the 200-Day Moving Average (DMA) last month now at 0.8625. Economists at Société Général analyze the pair’s outlook. 

    0.8490 is first support

    EUR/GBP is in vicinity to low of last August near 0.8490 which could be an interim support.

    Daily MACD has started posting positive divergence denoting receding downward momentum.

    The down move has tentatively stalled; retest of 200-DMA near 0.8625 can’t be ruled out. This must be overcome to confirm an extended bounce.

    In case the pair fails to defend 0.8490, the phase of correction could extend towards projections of 0.8455 and 0.8385.

  • 06.02.2024 08:29
    EUR/GBP: Bullish profile this year – ING

    After a strong start to the year, the Pound Sterling (GBP) has retreated somewhat at the start of February. Economists at ING analyze GBP outlook.

    BoE talks rate cuts

    We have not heard too much from the Bank of England this year outside of MPC meetings, but Chief Economist Huw Pill suggested on Monday that a rate cut was possible this year and that inflation did not need to be at 2% before action could be taken. Those comments have helped drag EUR/GBP further away from big support levels at 0.8500/0.8525.

    We do have a bullish profile for EUR/GBP this year – largely on the view that the BoE cuts more aggressively than the ECB. Let's get the Sterling positive event risk of the budget out of the way in early March and then the market should be able to focus on the sharp drop in UK headline inflation through the second quarter, as well as a softer Pound.

     

  • 06.02.2024 04:30
    EUR/GBP edges lower to near 0.8570 ahead of Retail Sales data from Eurozone, UK
    • EUR/GBP faces a challenge as the BoE is expected to avoid rate cuts in its upcoming meeting.
    • BoE Chief Economist Huw Pill called the expectation of interest rate cut premature.
    • OECD anticipated EU inflation to persist above the ECB's 2% target until some point after 2025.

    EUR/USD snaps its three-day winning streak, edging lower to around 0.8570 during the Asian session on Tuesday. However, the Pound Sterling (GBP) might have received upward support against the Euro (EUR) from the improved Purchasing Managers Index (PMI) data from the United Kingdom (UK). Furthermore, traders will likely watch the Retail Sales data from both economies on Tuesday.

    The Bank of England's (BoE) Chief Economist and Executive Director for Monetary Analysis, Huw Pill, stated on Monday that although the prevailing sentiment points toward potential interest rate cuts in the future, expectations for such cuts might be premature. Pill emphasized that the BoE is seeking more robust evidence that UK inflation will continue to decrease in the coming months before considering any rate-cutting measures.

    UK S&P Global/CIPS Composite PMI increased to a reading of 52.9 against the market expectation of remaining the same at 52.5 in January. Meanwhile, Services PMI improved to 54.3 as compared to the expected 53.8. On the other side, the annual EU Producer Price Index (PPI) saw a substantial decline of 10.6% in December, surpassing the expected decrease of 10.5% and exceeding the previous figure of 8.8%. Meanwhile, the monthly index exhibited a fall of 0.8%, in line with expectations, with the previous decline being 0.3%.

    The EUR/GBP cross experienced downward pressure as the EU block is grappling with a disinflationary trend, raising the possibility that the European Central Bank (ECB) may contemplate implementing policy measures to address the situation. According to the Organisation for Economic Co-operation and Development (OECD), inflation in Europe is anticipated to persist above the ECB's 2% target until some point after 2025.

     

  • 05.02.2024 16:28
    EUR/GBP threatens the 20-day SMA after European PMIs
    • The EUR/GBP stands at 0.8560, marking a 0.25% increase in the session.
    • European PMIs from January where upwards revised but remained still in contraction territory.
    • Hourly indicators hint at potential consolidation after bulls got rejected near overbought area.

    In Monday's session, the EUR/GBP pair was seen trading at 0.8560, gaining a 0.25% and seems to be marching towards the 20-day Simple Moving Average (SMA) at 0.8565 . Despite pressures from a stagnant Euro Area economy and anticipations of ECB's rate cut, the daily chart indicates the dominance of buyers. On the hourly chart, however, indicators hint at a possible pullback as they got rejected near the overbought territory.

    During the European session, the Hamburg Commercial Bank (HCOB) PMIs from January where upwards revised which gave some traction to the EUR but they still remain deep in contraction area. This situation may push the ECB to initiate a rate cut by June 2024, assuming the economies continue to weaken. Conversely, the UK economy shows signs of potential firmness with the Bank of England (BoE) shifting from assessing the need for restrictive monetary policy to sustaining the current stance. Following the bank's decision to hold rates, market anticipates around 100 bps of rate cuts for 2024, which might be moderated due to expected fiscal amendments. On the ECB side, markets expect between 125 and 150 bps of easing in 2024 and this divergences may eventually limit any upwards movements by the cross.

    EUR/GBP levels to watch

    Assessing the daily chart indicators, the Relative Strength Index (RSI) is glimpsing a positive gradient despite being within negative territory. This exhibits a potential shift towards an upward trend as bulls start to conquer additional ground. In addition, the Moving Average Convergence Divergence (MACD) is exhibiting increased green bars, suggesting that the upward force is taking control. The shift in momentum may come into fruition in case the buyers manage to push the pair back above the 20-day Simple Moving Average (SMA) .

    Switching to the hourly chart for the more immediate perspective, the scenario seems to be a bit more complicated for the bulls. Even though indicators have been rebuffed near overbought territory, the RSI portrays a downward slope positioned within positive territory, indicating some selling momentum as buyers seem to be taking profits. However, the sustained growth in the green bars of the MACD identifies a continuous buying pressure in the shorter timeframe. 

    EUR/GBP daily chart

  • 05.02.2024 13:34
    EUR/GBP recovers strongly from 0.8520 on UK’s dismal outlook
    • EUR/GBP rebounds sharply from 0.8520 as BoE could lean towards early rate cuts.
    • Fears of a recession in the UK economy have deepened.
    • The ECB is expected to start the rate-cut campaign.

    The EUR/GBP pair discovers strong buying interest near 0.8520 in the late European session. The asset recovered as investors saw the Bank of England (BoE) reducing interest rates earlier than market participants anticipated.

    In the revised estimates, the United Kingdom Office for National Statistics (ONS) reported a contraction in the third quarter of 2023 by 0.1%. The UK economy is underperforming due to labor market and consumer spending, which could lead to a further slowdown in the fourth quarter. The UK economy would be considered in a technical recession if it contracts for the second time in a row.

    In the BoE’s monetary policy announced last week, policymakers decided to keep interest rates at 5.25%. When asked about rate cuts, the BoE said they are unlikely until there is evidence that inflation will return sustainably to the 2% target. Swati Dhingra voted for a reduction in interest rates by 25 basis points (bps).

    The Pound Sterling faces pressure against the Euro despite the S&P Global reported upbeat Service PMI data for January. The economic data landed at 54.3, which remained better than the expectations, and the former reading of 53.4.

    On the Eurozone front, the European Central Bank (ECB) sees interest rates declining from late Summer as current price pressures exceed the central bank's desires. The progress in inflation declining towards 2% is much stronger as producers have significantly reduced prices of goods and services offered at factory gates. In December, the annual Producer Price Index (PPI) deflated at a stronger pace of 10.6% against expectations of 10.5% and the prior figure of 8.8%.

     

  • 02.02.2024 16:21
    EUR/GBP edges mildly higher, still tallies a losing week
    • The EUR/GBP mildly gained to settle at 0.8535, marking a slight retreat for bears after January's significant push.
    • The cross will tally its sixth consecutive losing week.
    • Markets perceived a dovish tone in the BoE’s decision on Thursday which led to a GBP weakening.

    On Friday's session, the EUR/GBP was spotted trading mildly higher at 0.8535, marking scant gains. Although the daily chart displays a neutral to bearish sentiment, sellers appear to be taking a pause, following their push of the pair by over 1.60% in January. Meanwhile, on the weekly chart, indicators linger deep in negative territory, suggesting sellers remain dominant.

    On the fundamental side, the Sterling closed the week weaker due to the Bank of England delivering a dovish hold on Thursday. The Bank changed its language and left behind the ‘further tightening’ stance while surprisingly, Swati Dhingra voted for a rate cut. Market forecasts 100-125 basis points worth of rate cuts this year, likely starting in Q2 and as for now, is less easing priced in than the European Central Bank’s (ECB) which may likely limit the upside for the cross.

    EUR/GBP technical analysis

    The indicators on the daily chart testify to a negative outlook for the cross as the bears mark the terrain. The Relative Strength Index (RSI) attempts to counteract the bearish atmosphere, displaying a positive slope, but is still languishing in a negative territory. Simultaneously, the Moving Average Convergence Divergence (MACD) continues to exhibit its bearishness with diminishing red histogram bars. Furthermore, the currency pair's performance below the 20-day, 100-day, and 200-day Simple Moving Averages (SMAs) evidences the overarching dominance of bearish sentiments. However, following the pair's downtrend being pushed by more than 1.60% over the course of January,the bears taking a breather which may give room for some upside in the short term.

    Moving on to the larger time frame, the weekly chart also calibrates a similar pattern, further solidifying the bearish atmosphere. The Relative Strength Index (RSI) on this chart too, is on a negative trajectory while the Moving Average Convergence Divergence (MACD) mimics its daily brother, again with decreasing red bars. That being said, after tallying its sixth straight weekly loss, the pair may consolidate next week, favoring the case of further upward movements.

    EUR/GBP daily chart

     

  • 02.02.2024 05:52
    EUR/GBP trims losses below the mid-0.8500s, the upside seems limited amid BoE's hawkish guidance
    • EUR/GBP attracts some buyers near 0.8531 in Friday’s early European session.
    • The Bank of England (BoE) kept interest rates unchanged and softened its stance about when rates would be cut.
    • The Eurozone annual inflation eased to 2.8% YoY in January from 2.9% in December. 

    The EUR/GBP cross gains ground below the mid-0.8500s during the early European session on Friday. Nonetheless, the upside of the cross seems limited. The Bank of England (BoE) held rates steady at its January meeting on Thursday, and BoE Governor Andrew Bailey said more evidence of inflation is needed before lowering rates. At press time, the cross is trading at 0.8531, gaining 0.03% on the day. 

    On Thursday, six out of nine members of the BoE’s Monetary Policy Committee voted to keep rates at a 15-year high of 5.25%. During his speech, UK central bank Governor Andrew Bailey stated that the BoE needs to see more evidence that inflation is on the course of the 2% target before they can lower interest rates. Furthermore, the sticky inflation and wage growth in the UK economy might convince the BoE to keep rates on hold longer than the European Central Bank (ECB). This, in turn, might lift the Pound Sterling (GBP) and act as a headwind for the EUR/GBP cross. 

    On the Euro front, the Eurozone Harmonized Index of Consumer Prices (HICP) eased to 2.8% YoY in January from 2.9% in December, in line with market expectations. Meanwhile, the Core inflation dropped to 3.3% YoY in the same month from the previous reading of 3.4%, above the market consensus of 3.2%. Investors anticipate that the ECB will probably cut interest rates in April, contributing to the Euro's recent weakness.

    Later on Friday, the French Industrial Output and Budget Balance for December will be due. Also, BoE Chief Economist Huw Pill is set to speak on Friday.

     

  • 01.02.2024 16:26
    EUR/GBP slightly rises following BoE’s decision, European inflation figures
    • The EUR/GBP is trading at 0.8545, with 0.25% gains.
    • The BoE held interest rates steady, as expected.
    • Eurozone’s inflation figures from January came in higher than expected

    In Thursday's session, the EUR/GBP rose to 0.8545, showing a 0.25% gain. The pair's daily chart maintains a neutral to bearish perspective, with bulls attempting to regain control and building momentum. Buyers won momentum after hot inflation figures from the Eurozone but the Bank of England’s hawkish stance may limit the upside.

    The Bank of England opted to keep interest rates steady at 5.25%, marking the fourth consecutive unchanged decision. Six of the nine Monetary Policy Committee members supported maintaining the status quo, while Catherine Mann and Jonathan Haskel voted for a 25 basis points increase to 5.50%, and Swati Dhingra endorsed a similar-sized decrease. In addition, during the press conference, Andrew Bailey emphasized keeping interest rates higher for longer showing confindence that inflation will eventually reach the bank's 2% target.

    On the other hand, the Eurozone’s Core Harmonized Index of Consumer Prices (HICP) came in higher than expected at 3.3% and gave the Euro a lift. However, after the first decisions of the European Central Bank (ECB) and the BoE, monetary policies divergences are favoring the Pound as markets anticipate less easing by the British bank. Incoming data will still dictate the trajectory of the cross for the next sessions.

    EUR/GBP levels to watch

    Based on the technical indicators from the daily chart, the bears seem to be maintaining control on a broader scale despite the gains. The Relative Strength Index (RSI) is on a positive slope, indicating potential strength among buyers. However, it is still in the negative territory, suggesting that negative momentum is still prevalent. Furthermore, the Moving Average Convergence Divergence (MACD) continues to present red bars, indicating a steady bearish momentum. In addition, the pair remains below the Simple Moving Averages (SMA) of 20,100 and 200-day period, suggesting the bears' continued dominance on a broader scale. Therefore, for an upward trajectory to be established, buyers will need to demonstrate a more substantial momentum shift.

     

    EUR/GBP daily chart

  • 01.02.2024 13:14
    EUR/GBP turns vulnerable near 0.8500 as BoE delivers a hawkish guidance
    • EUR/GBP sees more downside below 0.8500 as the BoE chose high inflation over a poor economic outlook.
    • Six out of eight BoE policymakers supported for keeping interest rates unchanged at 5.25%.
    • The Eurozone HICP deflated significantly in January.

    The EUR/GBP has been heavily dumped by the market participants as the Bank of England (BoE) has kept interest rates unchanged at 5.25%. The BoE was expected to leave interest rates steady for the fourth straight time, but hawkish guidance has improved the appeal for the Pound Sterling.

    Out of the eight-member led Monetary Policy Committee (MPC), policymakers Jonathan Haskel and Catherine Mann voted for further quantitative tightening by 25 basis points (bps). BoE Governor Andrew Bailey has supported for keeping interest rates restrictive for a longer period until they get confident that inflation will decline to 2%. Bailey says the time period for a restrictive interest rate stance will be based on incoming data.

    The outlook for the Pound Sterling has strengthened against the Euro as the BoE has chosen high inflation over deepening recession fears. According to the revised estimates of the United Kingdom Office for National Statistics (ONS), the economy witnessed a de-growth of 0.1% in the third quarter of 2023. A similar performance in the final quarter will be considered a technical recession. Also, hawkish signals would heavily impact business optimism.

    On the Eurozone front, the preliminary Harmonized Index of Consumer Prices (HICP) for January softened significantly monthly. Headline and core HICP were contracted by 0.4% and 0.9% respectively. Annually, the core CPI decelerated to 3.3% from 3.4% in December but failed to match estimates of 3.2%.

    Meanwhile, investors await fresh cues about when and how much the European Central Bank (ECB) will reduce interest rates in 2024. ECB President Christine Lagarde said earlier that the ‘rate-cut’ campaign could start in late Summer.

     

  • 01.02.2024 10:28
    EUR/GBP: Pound Sterling to depreciate to just under 0.9000 by early 2025 – Standard Chartered

    Economists at Standard Chartered expect the Pound Sterling (GBP) to underperform as the Bank of England is likely to cut at a quicker pace than they had previously expected.

    Stronger easing path adds risk of GBP underperformance

    We already expect EUR/GBP to depreciate to just under 0.9000 by early 2025. 

    The more rapid pace of easing that we now see adds a little more risk of GBP underperformance in coming months. 

    Most of the risk is concentrated in the next quarter or two, where our forecast has GBP firming slightly against the USD. We do not see major downside risk, rather risk that GBP keeps treading water at current levels.

  • 31.01.2024 13:01
    EUR/GBP: Scope to edge lower to the 0.8400 level on a six-month view – Rabobank

    Apart from a period during Autumn 2023, EUR/GBP has been mostly confined to the 0.8700 to 0.8500 range since late May last year. Economists at Rabobank analyze the pair’s outlook.

    EUR/GBP set to break lower?

    We continue to see scope for EUR/GBP to edge lower to the 0.8400 level on a six-month view. Our forecast that the BoE is more likely to disappoint market doves than encourage them at Thursday’s policy meeting supports this view. 

    Despite GBP’s strong start to the year, CFTC speculators’ positioning data suggest that net longs are still moderately sized. This suggests there is scope for upside in GBP on a hawkish takeaway from the BoE. By contrast, the market has remained resolutely long EUR since the end of 2022 despite the flow of soft data releases from Germany.

    It is our view that the ECB will keep policy on hold until it has greater certainty that wage inflation in the Eurozone has moderated. However, market interpretations that the ECB adopted a slightly more dovish position at its January policy meeting is likely to increase the EUR’s sensitivity to soft economic data in the Eurozone and encourage a reduction in net long positions.

     

  • 31.01.2024 07:25
    EUR/GBP could extend declines – MUFG

    EUR/GBP has been racing towards 0.8500, lowest since August. Economists at MUFG Bank analyze the pair’s outlook.

    Scope for further GBP strength versus EUR 

    We continue to hold a USD bullish bias and if GBP is to respond to a less dovish than expected BoE policy update, we see scope for EUR/GBP to extend the current move to the downside. 

    EUR/GBP is approaching the 2023 low of 0.8493 and a break of that level should open up a more rapid move back to the 0.8400 level that last traded in August 2022.

     

  • 31.01.2024 06:24
    EUR/GBP struggles to gain ground ahead of German Retail Sales and CPI data
    • EUR/GBP attracts some sellers in Wednesday’s European session. 
    • ECB’s Lagarde said wage data would be crucial in determining when to start monetary easing.
    • The Bank of England (BoE) is anticipated to hold rates steady at 5.25% at its January meeting.
    • The December German Retail Sales and the CPI inflation data will be due later on Wednesday.

    The EUR/GBP cross remains on the defensive below the mid-0.8500s during the early European session on Wednesday. Investors await the German Retail Sales and Consumer Price Index (CPI) data on Wednesday for fresh impetus. The cross currently trades around 0.8535, losing 0.05% on the day. 

    The December German Retail Sales and the preliminary CPI inflation data on Wednesday could influence the European Central Bank (ECB) rate path. The CPI figure is expected to drop to 3.3% YoY from 3.7% in the previous reading, while Retail Sales is projected to increase by 0.7% in December after sliding by 2.5% in November. If the report shows weaker-than-expected data, this could exert some selling pressure on the Euro (EUR) against the British Pound (GBP). 

    ECB President Christine Lagarde said on Tuesday that it’s premature to begin talking about cuts while adding that wage data would be crucial in determining when to start monetary easing. According to a Reuters analysis of LSEG data, investors have priced in nearly 60% odds of first rate cuts in April.

    On the other hand, the Bank of England (BoE) will announce its monetary policy decision on Thursday. Investors anticipate the BoE to hold rates steady at 5.25% at its January meeting. While the central bank may soften its message about the prospect of future cuts, investors expect no rate cuts in the upcoming months. This, in turn, might lift the GBP and act as a headwind for the EUR/GBP cross. 

    Looking ahead, market participants will keep an eye on German Retail Sales, CPI inflation, and Unemployment Rate. The BoE monetary policy meeting on Thursday will be in the spotlight. Traders will take cues from the event and find trading opportunities around the EUR/GBP cross.

     

  • 30.01.2024 16:35
    EUR/GBP surges after Eurozone GDP data, bears take a breather
    • The EUR/GBP secured a 0.50% rally to rest at 0.8565.
    • The Eurozone’s Q4 GDP data came in better than expected.
    • Signs of bearish exhaustion are seen on the daily chart.

    On Tuesday's session, the EUR/GBP was witnessed at 0.8565, exhibiting a 0.50% rally. The daily chart reflects a neutral to bullish outlook with bears taking a breather after driving prices to multi-month lows. All eyes are on the Bank of England (BoE) decision on Thursday as monetary policy divergences with the European Central Bank (ECB) are the one who pushed the cross lower in the last sessions.

    In Q4 2023, the Eurozone economy measured by the Gross Domestic Product (GDP) stagnated but slightly outperformed market expectations which seemed to have given the EUR a lift. As stated by Eurostat, investment spending slowed, largely due to surged interest rates leading to reduced loan demand. On Wednesday, inflation figures from January are due and may generate further volatility on the pair as it might affect the expectations on the next ECB decisions.

    EUR/GBP levels to watch

    The daily chart, suggests that the bears ran out of steam. The Relative Strength Index (RSI) shows a positive incline, albeit still within the negative territory, hinting at a decrease in downward momentum. This, coupled with the Moving Average Convergence Divergence (MACD) displaying a reduction of red bars, further strengthens the view that the selling pressure may be lessening. However, the pair's positioning below the 20, 100, and 200-day Simple Moving Averages (SMAs), relays the message that in the grand scheme, bearish momentum remains the dominant force. The recent push to multi-month lows by the bears signifies they are still commanding the market, and that they are currently taking a respite.

    Inspecting the shorter four-hour chart, there's a noticeable uptick in buying force. This is evident by the RSI nearing the overbought zone, signifying an increased bullish momentum. The MACD also dovetails with this sentiment as the number of red bars is tapering, suggesting a subsiding in selling forces.

    EUR/GBP daily chart

     

  • 30.01.2024 09:55
    EUR/GBP to trend down towards 0.8400 by H2 – Rabobank

    Economists at Rabobank analyze Pound Sterling (GBP) outlook ahead of this year’s UK general election.

    UK election will fail to ignite budgetary fireworks

    Ahead of this year’s UK general election, the ruling Tory party continues to keep the headline writers happy with stories of potential rebellion and new factions. GBP, however, remains unmoved. 

    The fact that the Tory party has been trailing Labour by around 20 pts in the polls for months, appears to have made these reports irrelevant.  

    The poor state of UK finances suggests that whoever wins the keys of No 11 Downing Street after the election will be forced to maintain budgetary prudence.  

    Given signs that the UK election will fail to ignite budgetary fireworks, we continue to expect EUR/GBP to trend down towards 0.8400 by H2.

     

  • 30.01.2024 06:08
    EUR/GBP moves lower to near 0.8520 ahead of GDP data from Eurozone, Germany
    • EUR/GBP faces downward pressure before the release of GDP data from the Eurozone and Germany.
    • BoE officials emphasized prolonging the restrictive monetary policy to tackle inflation.
    • ECB is expected to reduce interest rates by 50 bps by June and 140 bps by December 2024.

    EUR/GBP continues its downward trend for the second consecutive session, leading up to the upcoming Bank of England (BoE) interest rate decision scheduled for Thursday. As of the Asian session on Tuesday, the pair trades around 0.8520, indicating a decline in value. Investors are closely monitoring these developments in anticipation of the impact the BoE's decision may have on the EUR/GBP pair.

    Market expectations suggest that the Bank of England (BoE) is likely to maintain its current interest rate of 5.25%. BoE members have emphasized the significance of sustaining a prolonged period of restrictive monetary policy to tackle inflation concerns, contributing to the strength of the Pound Sterling (GBP). This, in turn, acts as a headwind for the EUR/GBP pair.

    However, there has been an adjustment in market participants' expectations for rate cuts, with the first cut now fully priced in for June. Initially anticipated for May, this shift in expectations is noteworthy and is likely to influence trading dynamics for the EUR/GBP pair following the upcoming BoE decision.

    The Euro (EUR) is encountering downward pressure following the European Central Bank's (ECB) decision to maintain its Main Refinancing Operations Rate at 4.50% and the Deposit Facility Rate at 4.0%. Despite this decision, there is growing anticipation in the market for ECB rate cuts, with expectations of a 50 basis points (bps) reduction by June and a more substantial 140 bps cut by December 2024.

    In a recent statement on Monday, ECB Vice President Luis de Guindos indicated that the ECB would contemplate interest rate cuts once there is confidence that inflation aligns with the central bank's 2.0% goal. He pointed out positive developments in inflation and suggested that these favorable trends would eventually influence the ECB's monetary policy.

    Looking ahead, the release of the quarterly Gross Domestic Product (GDP) figures for the Eurozone and Germany is scheduled for Tuesday, adding another layer of significance to the evolving economic landscape.

     

  • 29.01.2024 16:19
    EUR/GBP Price Analysis: Bears maintain control and push the cross to fresh multi-month lows
    • The EUR/GBP slipped to 0.8520, its lowest level since August 2023 recording 0.23% losses.
    • The daily chart reveals RSI nearing oversold territory, hinting at intense selling pressure.
    • If indicators hit oversold conditions a technical correction may be on the horizon.

    In Monday's session, the EUR/GBP pair is trading at 0.8520, reflecting a 0.23% decline. It seems the bears have a firm grip on the daily chart, exhibiting a bearish bias for the cross. While bears retain control, the four-hour indicators hint at a near oversold state, suggesting a possible shift in momentum could be looming.

    Fundamentally speaking, the pair faces significant pressure due to diverging monetary policy tones by the European Central Bank (ECB) and the Bank of England (BoE). For the rest of the week, investors will take a close look at the BoE’s decision on Thursday as well as key inflation figures from the Eurozone from January as the divergences may expand and apply further pressure on the cross.

    EUR/GBP levels to watch

    The daily chart displays a bearish environment with the cross trading below its three major Simple Moving Averages (SMAs). Such a situation indicates the bears are currently exerting dominance over the pair. In addition, the Relative Strength Index (RSI) also corroborates this dominance, standing close to oversold levels, hence suggesting that selling momentum is prominent. In the face of rising red bars on the Moving Average Convergence Divergence (MACD), this further reinforces the bearish outlook.

    Shifting the focus on the shorter timeframe, the four-hour chart provides the same outlook. Similar to the daily chart, here too, the RSI is almost touching the oversold threshold. This attribute is a secondary confirmation of the stronger selling momentum. Moreover, the red bars of MACD on the four-hour chart are accentuating, aligning with the prevalent bearish view. That being said,the near oversold indications on both timeframes might imply a potential corrective bounce back, hence traders should maintain caution.

    EUR/GBP daily chart

     

  • 26.01.2024 16:27
    EUR/GBP Price Analysis: Bears take a breather by the end of the week, cross still tallies a weekly loss
    • EUR/GBP gained momentum and rose to 0.8540.
    • The cross will tally a 0.40% weekly loss, and the daily chart shows that the bears are in command.
    • In the four-hour chart indicators gained momentum.

    During Friday's trading session, the EUR/GBP rose slightly to 0.8540 showing mild gains. That being said, the bears asserted their influence during the week, leading to a weekly loss of 0.40% pushing the cross down to its lowest point since September.

    In that sense, the main factor that is benefiting the Pound over the Euro is that the British economy is holding resilient while the European economies are showing signs of weakness. Moreover, markets are expecting less easing from the Bank of England (BoE) with a total of 125 bps of cuts vs the expected 150 bps from its European peer which also benefits the GBP. This week the ECB met and left its policy unchanged with subtle indications on when the easing will begin, and as for now, markets are seeing the first cut somewhere in Q2.

    EUR/GBP daily chart

    From a technical outlook on the daily chart, evidence of strong bearish pressure resonates. This is reflected by the negative terrain of the Relative Strength Index (RSI) coupled with its downward slope. Complementing this bearish bias are the increasing red bars of the Moving Average Convergence Divergence (MACD), indicating the potential for further downturns. Moreover, the cross remains entrenched below the 20, 100, and 200-day Simple Moving Averages (SMAs).

    Switching to a shorter, four-hour timeframe, a different scenario appears to be forming as indicators seem to be entering in a consolidation phase. The four-hour RSI indicates a positive slope, albeit still within negative territory, signaling a weak recovery moment. Additionally, the decreasing red bars in the four-hour MACD offer a hint of bullish momentum, but without a clear vindication of a reversal. Thus, the buying momentum is seen to have a slight upper hand in this lower time frame, but with a need for further corroboration to offset the broader bearish outlook.

     

    EUR/GBP daily chart

4 / 7

© 2000-2024. All rights reserved.

This site is managed by Teletrade D.J. LLC 2351 LLC 2022 (Euro House, Richmond Hill Road, Kingstown, VC0100, St. Vincent and the Grenadines).

The information on this website is for informational purposes only and does not constitute any investment advice.

The company does not serve or provide services to customers who are residents of the US, Canada, Iran, The Democratic People's Republic of Korea, Yemen and FATF blacklisted countries.

AML Website Summary

Risk Disclosure

Making transactions on financial markets with marginal financial instruments opens up wide possibilities and allows investors who are willing to take risks to earn high profits, carrying a potentially high risk of losses at the same time. Therefore you should responsibly approach the issue of choosing the appropriate investment strategy, taking the available resources into account, before starting trading.

Privacy Policy

Use of the information: full or partial use of materials from this website must always be referenced to TeleTrade as the source of information. Use of the materials on the Internet must be accompanied by a hyperlink to teletrade.org. Automatic import of materials and information from this website is prohibited.

Please contact our PR department if you have any questions or need assistance at pr@teletrade.global.

Bank
transfers
Feedback
Live Chat E-mail
Up
Choose your language / location