EURGBP tests 0.88 as UK Budget crisis deepens: Where next?The dollar crushed all majors yesterday, but EURGBP tells a different story. The euro is surging against the pound as UK fiscal chaos and bets on a BOE rate cut accelerate. With an ascending triangle breakout confirmed, traders are targeting 0.89 and the psychological 0.90 handle.
The Office for Budget Responsibility just revealed a £20 billion fiscal hole, forcing Chancellor Reeves to make tough choices in November's budget. Meanwhile, markets price 68% odds of a December BOE rate cut as inflation cools—two mega catalysts for GBP weakness.
Key drivers
UK fiscal crisis: £20 billion productivity forecast slash ahead of November 26 budget forces austerity measures, crushing pound confidence
BOE rate cuts priced In: 68% December cut odds versus 30% November (food prices down 0.4% month-on-month, retail deflation for first time since March)
Technical breakout: Ascending triangle break above 0.8800 opens clean path to 0.89 and 0.90; golden 61.8% Fibonacci sits at 0.8872 as magnet level
Wedge pattern risk: Multiple Fibonacci clusters (0.89, 0.8876, 0.90) confirm upside targets, but final wave of rising wedge warns of sharp retracement after targets hit
How to trade EURGBP?
Long above 0.8775, target 0.8872 (golden Fib magnet) then 0.89-0.90. Stop below 0.8750. Watch BOE communications and November 26 budget details for confirmation. UK in crisis mode—don't fade the breakdown.
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