The EURGBP pair, currently trading at 0.85721, is predicted to maintain its downward trend due to the European Central Bank’s decision to increase interest rates by 25 basis points to 4.25%.

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• EUR/GBP is expected to continue its downside momentum as the ECB raised interest rates by 25 bps to 4.25%.

The pair currently trades last at 0.85721.

The previous day high was 0.8586 while the previous day low was 0.8561. The daily 38.2% Fib levels comes at 0.8571, expected to provide support. Similarly, the daily 61.8% fib level is at 0.8577, expected to provide resistance.

The EUR/GBP pair as the European Central Bank (ECB) has hiked interest rates on refinancing operations by 25 basis points (bps) to 4.25% as expected by the market participants. Also, deposit facility rates rose by 25 bps to 3.75%. The interest rate hike announcement from ECB President Christine Lagarde was warranted as core price pressures in the Eurozone are still stubborn.

In June headline inflation was softened to 5.5% as energy prices are consistently declining while core inflation seems stubborn due to rising wages. Investors are worried that headline inflation could rebound as global oil prices have recovered well in the past month and could propel inflationary pressures again.

As an interest rate hike of 25 bps by the ECB was highly anticipated, investors will now turn cautious about September monetary policy meeting. Going forward, investors will focus on preliminary German Gross Domestic Product (GDP) data for the second quarter. As per the preliminary report, GDP expanded at a nominal pace of 0.1% in the second quarter. In the first quarter, the German GDP contracted by 0.3%. On an annualized basis, consecutive contraction is expected in GDP by 0.3%.

Meanwhile, the Pound Sterling is in a bullish trajectory as the Bank of England (BoE) is preparing to raise interest rates consecutively for the 14th time. The United Kingdom’s economy is facing the burden of BoE’s aggressive monetary policy. Advisers to UK Finance Minister Jeremy Hunt have flagged concerns over deepening recession risks as the BoE has sharply raised interest rates.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8576 at the time of writing. Pair opened at 0.8566 and is trading with a change of 0.12 % .

The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.8584, 50 SMA 0.86, 100 SMA @ 0.8693 and 200 SMA @ 0.8728.

The previous day high was 0.8586 while the previous day low was 0.8561. The daily 38.2% Fib levels comes at 0.8571, expected to provide support. Similarly, the daily 61.8% fib level is at 0.8577, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8556, 0.8546, 0.853
• Pivot resistance is noted at 0.8582, 0.8597, 0.8607

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