EUR/GBP: Traders Navigate Uncertainty in the Forex Market

EUR/GBP traders navigate Forex uncertainty as central bank decisions and technical patterns influence market dynamics. Stay informed about strategic moves.

Despite a mixed UK jobs report, the British pound experienced minimal fluctuations against the euro and USD in recent developments. The data revealed robust changes in employment and unemployment figures but fell short in the wage department, suggesting that wages, including bonuses, may not surpass the 8% mark in the UK. However, analysts view this development as a positive factor in the Bank of England’s (BoE) ongoing struggle against inflation.

The Office for National Statistics reported a continuous decline in job vacancies for the 17th consecutive quarter, emphasizing a challenging labor market. Despite these fluctuations, the BoE’s stance on interest rates remains unchanged, with market expectations projecting approximately 75 basis points of cumulative rate cuts by December 2025. Analysts anticipate the first cut around June/August. During Thursday’s upcoming BoE rate decision, Governor Andrew Bailey is expected to resist rate cuts. This resistance is poised to support the narrative of a prolonged period of higher rates, potentially bolstering the pound.

Recently, the pound has been influenced by shifts in money market pricing for the European Central Bank (ECB) and the Federal Reserve. While the latest economic data suggests a weaker euro area than the UK, attention is now turning to this afternoon’s US Consumer Price Index (CPI) for further guidance.

EUR/GBP: Traders Navigate Uncertainty in the Forex Market

Technical Outlook for GBP/USD: Bulls Maintain Position Amidst Economic Uncertainty

From a technical perspective, daily GBP/USD price action has kept bulls above the 200-day moving average and the critical 1.2500 psychological level. However, the possibility of a retest of support levels looms, especially if the US CPI data proves to be higher than expected. Analysts identify the 1.2400 zone as a potential support level.

Key Technical Levels for GBP/USD

Resistance: 1.2900, 1.2848, 1.2746

Support: 1.2500, 200-day MA, 1.2400

Retail Trader Sentiment (GBP/USD): IG Client Sentiment Data reveals a mixed sentiment among retail traders, with an equal number holding long and short positions.

EUR/GBP Consolidates Amid Central Bank Decisions and Indecision Among Traders

EUR/GBP has recently exhibited consolidation, marked by multiple doji candle closes, reflecting trader indecision and forming a rectangle pattern. A breakout is anticipated, likely triggered by upcoming central bank decisions. Despite attempts to exit oversold territory on the Relative Strength Index (RSI) and early signs of bullish divergence, fundamentals lean towards more support for the UK, potentially extending the recent downtrend.

Key Technical Levels for EUR/GBP

Resistance: 200-day MA (blue), 0.8650, 0.8600

Support: 0.8549, 0.8524, 0.8500

Retail Trader Sentiment (EUR/GBP): IG Client Sentiment Data indicates a bullish sentiment among retail traders, with 74% holding long positions. However, there’s a potential shift in sentiment, as data shows a decrease in long positions and an increase in shorts.

As markets await further economic indicators, the GBP continues navigating through uncertainties influenced by domestic and international factors.

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