#EURGBP @ 0.87131 has climbed sharply above 0.8700 as the BoE is expected to pause its rate-hiking spree ahead. (Pivot Orderbook analysis)

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• EUR/GBP has climbed sharply above 0.8700 as the BoE is expected to pause its rate-hiking spree ahead.
• Downbeat UK Employment data adds to factors advocating for a pause in the policy-tightening spell by the BoE.
• ECB Lagarde already confirmed that more than one interest rate hikes are in pipeline.

The pair currently trades last at 0.87131.

The previous day high was 0.8718 while the previous day low was 0.8679. The daily 38.2% Fib levels comes at 0.8703, expected to provide support. Similarly, the daily 61.8% fib level is at 0.8694, expected to provide support.

The EUR/GBP pair has scaled firmly above the round-level resistance of 0.8700 in the early European session. The cross has witnessed a decent buying interest as investors are anticipating that the Bank of England (BoE) will pause its policy-tightening spell ahead.

Investors should not that BoE Governor Andrew Bailey raised interest rates by 25 basis points (bps) to 4.50% in its May monetary policy to tame the double-digit United kingdom inflation.

Economists at UOB believes that “The MPC no longer expects the UK economy to enter recession this year and now expects GDP to grow by 0.25% in 2023 and by 0.75% in 2024. Inflation is expected to remain above 10%, before falling sharply over the coming months, driven largely by falling energy prices.” They further added, “Whether the MPC will be comfortable with pausing by the time of the next meeting on 22 Jun will depend very much on incoming data and developments. However, we stick to our view that the BOE may pause as soon as next month.”

On Tuesday, UK‘s Employment data also remained below estimates. Three-month Unemployment Rate jumped to 3.9% vs. the estimates and the former release of 3.8%. Claimant Count Change (April) soared to 46.7K while the street was anticipating a decline by 10.8K. Also, Average Earnings excluding bonuses landed at 6.7%, missed estimates of 6.8%. This also adds to factors advocating for a pause in the policy-tightening spell by the BoE.

Meanwhile, the Euro is expected to perform relatively better as the European Central Bank (ECB) is expected to raise interest rates further. ECB President Christine Lagarde already confirmed that more than one interest rate hikes are in pipeline.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8707 at the time of writing. Pair opened at 0.8699 and is trading with a change of 0.09 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.8771, 50 SMA 0.879, 100 SMA @ 0.8814 and 200 SMA @ 0.8742.

The previous day high was 0.8718 while the previous day low was 0.8679. The daily 38.2% Fib levels comes at 0.8703, expected to provide support. Similarly, the daily 61.8% fib level is at 0.8694, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.8679, 0.8659, 0.864
• Pivot resistance is noted at 0.8719, 0.8738, 0.8758

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