#EURGBP @ 0.87151 is eyeing further sell-off below 0.8700 as BoE to raise rates further to bring down double-digit inflation. (Pivot Orderbook analysis)

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• EUR/GBP is eyeing further sell-off below 0.8700 as BoE to raise rates further to bring down double-digit inflation.
• Investors have been gung-ho for the Pound Sterling amid an absence of a confident roadmap for bringing down the UK’s inflation.
• Global interest rate hikes have heavily impacted German Industrial Production.

The pair currently trades last at 0.87151.

The previous day high was 0.8746 while the previous day low was 0.8719. The daily 38.2% Fib levels comes at 0.8729, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8736, expected to provide resistance.

The EUR/GBP pair looks vulnerable above the round-level support of 0.8700 in the Asian session. The cross is expected to display more weakness as investors are anticipating more interest rate hikes from the Bank of England (BoE) to soften double-digit United Kingdom inflation.

Investors have been gung-ho for the Pound Sterling amid the absence of a confident roadmap for bringing down the UK’s inflation to a 2% target. Economists at MUFG Bank do not expect the Bank of England meeting to weigh on the Pound Sterling. The Pound has remained the top-performing G10 currency in 2023, and the second-best performing in Q2 to date

BoE Governor Andrew Bailey has already pushed interest rates to 4.25% in the last 11 monetary policy meetings and now one more interest rate hike is widely anticipated. However, it is still difficult to agree that inflationary pressures will cover the huge gap between current inflation and the desired one.

Historic high food inflation, labor shortages due to earning retirements, and higher wage offerings have been major catalysts, which have been fueling inflationary pressures.

On the Eurozone front, higher interest rates by the European Central Bank (ECB), declining credit from Europe commercial banks, and weak Industrial output are claiming for a recession ahead. On Monday, monthly German Industrial Production contracted sharply by 3.4% vs. the expectations of a 1.0% contraction and the former release of a 2.1% decline. Global interest rate hikes have heavily impacted German Industrial Production due to the bleak demand for automobiles.

Over the interest rate guidance, ECB chief economist Philip Lane said that there was “a lot of disinflation” coming later this year but added that there was still “a lot of momentum” in inflation.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8714 at the time of writing. Pair opened at 0.872 and is trading with a change of -0.07 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.8807, 50 SMA 0.881, 100 SMA @ 0.882 and 200 SMA @ 0.8733.

The previous day high was 0.8746 while the previous day low was 0.8719. The daily 38.2% Fib levels comes at 0.8729, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8736, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.871, 0.8701, 0.8683
• Pivot resistance is noted at 0.8738, 0.8756, 0.8766

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