The EURGBP pair, currently at 0.85310, is consolidating after experiencing a decline, reaching its lowest point since August 2022 earlier this week.

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• EUR/GBP consolidates its recent slide to the lowest level since August 2022 touched this Monday.

The pair currently trades last at 0.85310.

The previous day high was 0.8566 while the previous day low was 0.8522. The daily 38.2% Fib levels comes at 0.8538, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8549, expected to provide resistance.

The EUR/GBP cross enters a bearish consolidation phase and oscillates in a narrow trading band around the 0.8525-0.8530 area, just above its lowest level since August 2022 touched this Monday.

The British Pound (GBP) continues with its relative outperformance on the back of expectations that the Bank of England (BoE) will keep raising interest rates, which, in turn, is seen as a key factor weighing on the EUR/GBP cross. In fact, the BoE is widely expected to hike the benchmark rates by 25 bps on Thursday, to 4.75% or the highest since April 2008. Moreover, the markets are pricing in the possibility of a bigger, 50 bps lift-off. The bets were reaffirmed by the upbeat UK jobs data released last week, which came in to show a near-record wage growth and a lower unemployment rate.

The downside for the EUR/GBP cross, however, seems cushioned in the wake of the European Central Bank’s (ECB) hawkish outlook, signalling that additional rate hikes will be needed to bring Eurozone inflation to its medium-term target of 2%. It is worth recalling that the ECB hiked interest rates for the eighth straight time last Wednesday, by 25 bps to 3.5% or the highest in 22 years. The inflation projection for this year was raised to 5.1% from 4.6%, suggesting that the central bank is still not done with its policy tightening and is seen lending some support to the shared currency.

Traders might also prefer to wait on the sidelines ahead of Wednesday’s release of the latest consumer inflation figures from the UK. This will be followed by the highly-anticipated BoE decision on Thursday, which will play a key role in influencing the Sterling and provide some meaningful impetus to the EUR/GBP cross. Apart from this, traders this week will take cues from the flash PMI prints from the Eurozone and the UK, due on Friday. Nevertheless, the aforementioned fundamental backdrop suggests that the path of least resistance for spot prices is to the downside.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8529 at the time of writing. Pair opened at 0.8532 and is trading with a change of -0.04 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.8616, 50 SMA 0.8709, 100 SMA @ 0.8771 and 200 SMA @ 0.8753.

The previous day high was 0.8566 while the previous day low was 0.8522. The daily 38.2% Fib levels comes at 0.8538, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8549, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8514, 0.8495, 0.8469
• Pivot resistance is noted at 0.8558, 0.8584, 0.8602

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