Final Eurozone Inflation Can’t Stop Downtrend in EURGBP
In June, EURGBP was retracing higher, gaining over 1 cent and closing the gap. But, in July, it reversed down and the decline has intensifie
In June, EURGBP was on an upward retracement, gaining over 1 cent and closing the negative gap. However, in July, it reversed after failing to break the 50 daily SMA, and the decline has intensified, indicating strong selling pressure just below 0.85, where the bearish reversal took place.
In 2023, the EUR/GBP was trading in a 2-cent range, but EUR/GBP broke through the key 0.85 support level in June due to a 30-pip downward gap triggered by political events in Europe following the recent European Elections. The price briefly dipped below 0.84, hitting a low of 0.8398 by mid-June, before retracing higher in an unsuccessful bullish attempt. The 50 SMA (yellow) turned into resistance at 0.85 and rejected the price, which has been bearish since then.
EUR/GBP Chart Daily – The 50 SMA Has Turned into Resistance Now
The European Central Bank (ECB) remains more dovish than the Bank of England (BOE), having already implemented interest rate cuts and considering further monetary easing, which should maintain downward pressure on this pair. Despite the BOE also leaning towards dovish policies as UK economic data weakens, the GBP still holds a stronger position compared to the euro. The contrasting monetary policies of the ECB and the BOE have created a dynamic where the euro is more susceptible to further declines against the pound.
The ECB’s aggressive stance on easing measures contrasts with the BOE’s cautious approach, which, despite a softer economic outlook, has not yet fully committed to significant rate cuts. As a result, the EURGBP pair is likely to continue facing selling pressure, especially if the ECB proceeds with additional easing while the BOE remains relatively more restrained. Traders will be closely monitoring the upcoming economic reports and policy statements from both central banks to assess the future trajectory of EUR/GBP.
Eurozone Final June CPI Inflation Report
- Eurozone June final CPI: +2.5% y/y (preliminary: +2.5%)
- May final CPI was: +2.6%
- Core CPI: +2.9% y/y (preliminary: +2.9%)
- May core CPI was: +2.9%
There are no revisions to the initial estimates, and this stable data doesn’t alter the outlook ahead of the ECB meeting tomorrow. Lagarde and her team are expected to maintain their current stance.
EUR/GBP Live Chart
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Related Articles
Comments
Sidebar rates
Related Posts
Save
Join 350 000+ traders receiving Free Trading Signals
Alerts
Rates
Calendar
Signals