The EURGBP pair has increased further above the 0.8600 level after reaching 0.86314, demonstrating continued upward movement.

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• EUR/GBP extends its upside and edges higher above the 0.8600 barrier.

The pair currently trades last at 0.86314.

The previous day high was 0.8648 while the previous day low was 0.8601. The daily 38.2% Fib levels comes at 0.863, expected to provide support. Similarly, the daily 61.8% fib level is at 0.8619, expected to provide support.

The EUR/GBP cross gains momentum and trades on a positive note for the sixth consecutive day during the early Asian session on Monday. Market participants await the Eurozone inflation data and the UK growth number due later on Tuesday and Friday, respectively. The cross currently trades around 0.8631, down 0.02% for the day.

The latest data from the Deutsche Bundesbank showed that Germany’s Factory Orders rose 3.0% YoY compared to -4.4% prior, while the monthly figure increase was 7.0% compared to 6.2% previously and -2.0% market expectations. Eurozone Retail Sales for June were mixed. The monthly figures fell to -0.3% vs. 0.2% expected and 0.6% previously, but the annual figures improved to -1.4% versus -1.7% market estimates and -2.4% prior.

Additionally, the Eurozone Producer Price Index (PPI) for June fell to its lowest level in three years on Thursday. The figure dropped -3.4% YoY vs. -3.1% expected and -1.6% prior. The bloc’s HCOB Composite PMI fell from 48.9 to 48.6. While the services PMI for July declined from 51.1 to 50.9,

The European Central Bank raised interest rates by 25 basis points (bps) to 4.25% last week. ECB President Christine Lagarde stated that the central bank will move towards achieving a medium-term inflation target of 2%. The hawkish stance of the ECB boosts the Euro against its rivals.

The Bank of England (BoE) chief economist, Huw Pill, stated on Friday that interest rates were expected to remain high for a longer period. He added that the central bank will be more data-dependent, and policymakers will respond as the economy and the data evolve.

It’s worth noting that the Bank of England (BoE) raised interest rates by 25 basis points (bps) to a 15-year high of 5.25% from 5% in its August policy meeting on Thursday. Markets anticipated that the BoE would likely hike two additional rates by the end of the year as inflation remains high. However, a significant deceleration in the headline UK Consumer Price Index (CPI), to 7.9% YoY in June from 8.7% in May, might require the UK central bank to hike rates at a slower pace.

BoE Governor Andrew Bailey stated on the policy outlook that the central bank expects inflation to fall to around 5% in October. He added that there is no presumed future path for interest rates. That said, the pessimistic economic outlook and the fear of recession in the UK exert pressure on the Pound Sterling and act as a tailwind for the EUR/GBP cross.

Looking ahead, market players will take cues from the Eurozone Harmonized Index of Consumer Prices YoY for July, due on Tuesday. The focus will shift to the UK preliminary Gross Domestic Product Q2 YoY on Friday. These data could provide hints for a clear direction in EUR/GBP.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.863 at the time of writing. Pair opened at 0.8633 and is trading with a change of -0.03 % .

The pair is trading above its 20 Daily moving average @ 0.8593, above its 50 Daily moving average @ 0.8588 , below its 100 Daily moving average @ 0.8678 and below its 200 Daily moving average @ 0.8725

The previous day high was 0.8648 while the previous day low was 0.8601. The daily 38.2% Fib levels comes at 0.863, expected to provide support. Similarly, the daily 61.8% fib level is at 0.8619, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.8607, 0.8581, 0.856
• Pivot resistance is noted at 0.8653, 0.8674, 0.87

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