EUR/GBP experienced a dip to a 22-month low at 0.8400 on Friday before seeing a slight recovery. This comes after a three-month decline from peaks above 0.8600 in April. The Euro is facing pressure due to ongoing political turmoil in Europe, particularly in France where President Macron has dissolved the government and called for snap elections to counter the rise of right-wing contender Marine Le Pen. The uncertainty in France has raised concerns about financial stability in the Eurozone.
Meanwhile, GBP traders are awaiting the upcoming rate call from the Bank of England (BoE) next week. The BoE’s Monetary Policy Committee (MPC) is expected to keep rates unchanged at 5.25%, but investors will be watching for any potential shifts in voting patterns. The UK Consumer Price Index (CPI) update scheduled for Wednesday will also provide insight into the state of the UK economy.
On the technical side, EUR/GBP is facing bearish momentum with the pair down 1.2% from its recent peak. It is on track to close in the red for the fifth consecutive week, signaling continued weakness in the pair. Sellers will be looking to push the pair below the 0.8400 handle, with the 200-day Exponential Moving Average (EMA) at 0.8460 acting as a key resistance level.
Overall, market sentiment towards EUR/GBP remains cautious as political uncertainty in Europe and upcoming events like the BoE rate call and UK CPI update are expected to drive price action. Traders will be closely monitoring developments in France and the UK to gauge the impact on the currency pair. This article provides an overview of the current market conditions and technical outlook for EUR/GBP.
