EURGBP | Will it extend last week's pressure?Macro approach:
- EURGBP has extended last week's pullback into this week, pressured by a slightly more resilient pound as markets reassess how quickly the BoE may ease policy.
- The euro has softened against sterling as recent Eurozone data and ECB communication have not added fresh hawkish momentum, encouraging some unwinding of long-euro positions built earlier in the quarter. At the same time, UK assets have found some support as investors question how aggressive future BoE cuts will be, limiting downside for the pound despite ongoing domestic growth headwinds.
- EURGBP may remain under mild downward pressure if upcoming UK activity and inflation data further reduce expectations for BoE easing. At the same time, Eurozone releases fail to revive confidence in the bloc's growth outlook. Upcoming BoE and ECB remarks, along with key UK and Eurozone data prints this week, could set the tone for whether this corrective bias extends or pauses.
Technical approach:
- EURGBP is declining toward EMA78 after retesting the broken level at 0.8750. The price is forming lower swings, indicating bearish pressure.
- If EURGBP breaches below EMA78, the price may plunge toward the immediate support at 0.8675, confluence with the ascending trendline.
- Conversely, staying above 0.8750 may prompt a further retest of the previous swing high around 0.8800.
Analysis by: Dat Tong, Senior Financial Markets Strategist at Exness
