The rate of EUR to GBP has been declining for months, however, it formed a support zone at 0.85 this year and in March, the support has increased. This shows that the downtrend has stopped and we might be at the beginning of a bullish trend, with moving averages also turning from resistance into support.

EUR/GBP Chart Daily – The 50 SMA Has Turned into Support

EUR/GBP stopped declining since the end of January and it has been consolidating within a tight range of 1 cent, fluctuating between 0.65 and 0.66. This consolidation pattern has persisted as the Bank of England (BOE) and the European Central Bank (ECB) influence the currency pair. However, recent Eurozone data, including the return to expansion of Eurozone Industrial Production as reported today, offer optimistic signals, contributing to a slight bullish move for this forex pair throughout the week which has sent it about 50 pips higher, trading between the 50 SMA (yellow) as support and the 100 SMA (green) as resistance on the daily chart.

As the exchange rate approaches the upper limit of the range above 0.8550, traders will closely watch to see if buyers can push it above 0.66. Breaking above this level could indicate further upside potential for the EUR/GBP pair, potentially signaling a continuation of the bullish momentum. Traders will continue to monitor central bank policies, economic data releases, and any geopolitical developments that may impact the direction of the currency pair in the near term.

The euro experienced a decline following the dovish meeting by the European Central Bank (ECB) last week, despite the central bank maintaining interest rates unchanged at 4.50%. The official statement from the ECB left open the possibility of further easing measures if inflation keeps falling back below the target level. ECB President Lagarde also indicated that some policymakers were already confident enough to consider lowering interest rates.

It’s important to note that recent data for inflation and from certain sectors has beat expectations, prompting ECB officials to signal potential easing measures in the near future. The ECB’s decision has raised the likelihood of a rate cut in June, as the central bank remains committed to addressing the challenges posed by sluggish economic indicators and below-target inflation. However, the GBP has been turning quite bearish as well, keeping this pair above the 50 daily SMA. Last Friday’s price action showed that buyers are protecting the new support zone around the 50 SMA and chances are that this pair will head higher toward the 100 SMA now.

EUR/GBP Live Chart