The Bank of England is over today!
Will Central Bank Event Extend EUR/GBP Downtrend Over Days?
Or is she ready for a trip to higher interest areas?
EUR/GBP 15-minute forex Planned by TV
In case you missed it, EUR/GBP has been in a downtrend since earlier this month when the pair was rejected at 0.8830 levels.
One possible reason is that traders do not see that the European Central Bank (ECB) has much more room to raise interest rates despite members’ conviction to fight high inflation.
Meanwhile, the rising inflation rate in the UK along with the employment figures which remain on the right foot, gives more positive sentiments on the Bank of England (BOE) interest rate hike.
Let’s see if the short-term downtrend holds today.
The EUR/GBP has already broken above the trend line resistance that has been there all month.
In addition, the 100 simple moving average (SMA) appears poised to cross above the slower 200 SMA on the 15-minute time frame.
The Bank of England is expected to raise interest rates by 25 basis points today, something everyone and their neighbors already know about.
Putting the rumor and selling the news could pull the pound against the euro and push the EUR/GBP back to the daily resistance at 0.8700. The bullish momentum could push the pair to the main interest area .8730!
Before you buy the EUR/GBP as if there is no tomorrow, remember that the Bank of England will also publish new economic forecasts.
Lower growth and employment estimates may still put the BoE in “not much room for further rate hikes” with the ECB and extend EUR/GBP’s downtrend to fresh monthly lows.
For now, I will be looking for a long opportunity somewhere around S1 (8680) of the standard pivot points. I would look at the psychological handle .8700 and the major inflection point .8730 as potential profit targets.
Again, the play will depend on what the Bank of England has to say about the economy and how the markets react to it.
If you plan to day trade the pair, make sure you are aware of this Average volatility of EUR/GBP Before you implement your trading plans!
This content is for informational purposes only and does not constitute investment advice. Trading in any financial market involves risks. Please read our Risk Disclosure Statement to ensure you understand the risks involved.