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On Thursday, the EUR/GBP jumped to 0.8545, up 0.25%. The pair’s daily chart shows a neutral to negative outlook, with bulls striving to restore control and create momentum.
Buyers gained pace after the Eurozone’s strong inflation numbers, but the Bank of England’s hawkish stance may limit the gains. The EUR/GBP is trading at 0.8545, up 0.25%. The BoE kept interest rates unchanged, as predicted. Eurozone inflation data for January were higher than predicted.
The Bank of England decided to leave interest rates unchanged at 5.25% for the fourth time in a row. Six of the nine Monetary Policy Committee members backed keeping the status quo, while Catherine Mann and Jonathan Haskel voted for a 25 basis point rise to 5.50%, and Swati Dhingra voted for a corresponding drop.
Furthermore, during the press conference, Andrew Bailey emphasized the need of keeping interest rates high for an extended period of time, demonstrating confidence that inflation will finally achieve the bank’s 2% target.
On the other hand, the Eurozone’s Core Harmonised Index of Consumer Prices (HICP) came in higher than predicted at 3.3%, boosting the Euro. However, following the initial decisions of the ECB and the BoE, monetary policy divergences are favouring the Pound as markets expect less easing from the British bank. Incoming data will continue to affect the cross’s course in subsequent sessions.
According to the technical indicators on the daily chart, the bears appear to be holding control on a bigger scale despite the gains. The Relative Strength Index (RSI) is trending upward, indicating possible strength among buyers. However, it remains in the negative region, implying that negative momentum is still present. Furthermore, the Moving Average Convergence Divergence (MACD) continues to show red bars, indicating a consistent negative trend.
Furthermore, the pair stays below the Simple Moving Averages (SMA) of 20, 100, and 200 days, indicating that bears continue to dominate on a larger scale. As a result, in order to develop an upward trajectory, buyers must demonstrate a greater shift in velocity.
