by - The EURGBP price has wavered within a constricted range in the last few days.
- United Kingdom data shows the nation avoided recession in October.
- Meanwhile, market attention shifted to this week’s BoE & ECB financial decisions.
The EURGBP price has remained within a consolidation period as market participants re-focused on the coming Bank of England and European Central Bank financial decision. The pair traded at around 0.8600. And it has wavered within this territory over the last few days. Meanwhile, EUR-GBP’s price is 7.36% beneath the 22 September highest mark.
BoE & ECB Decision
The EURGBP exchange rate will be in the limelight this week, with market participants bracing for the month’s forex news. Yesterday, the ONS (Office of National Statistics) stated that the United Kingdom dodged an economic recession in October. Meanwhile, the economy grew by 0.5% in September-October. The uptick exceeded the 0.4% median forecast.
Yet, the economy saw a 0.3% contraction in the 90 days to October. That contraction represented the highest uptick since 2021 Q1. In last month’s statement, non-partisan administration officials warned that the United Kingdom would remain in a recession for some time.
The next EURGBP catalyst will be the United Kingdom consumer & producer inflation numbers on Wednesday. Analysts anticipate the data to indicate that UK’s headline inflation plummeted to 10.9% during November, whereas core inflation declined to 6.4% from 6.5%.
The BoE and ECB interest rate decisions remain the primary event to ponder this week. Reuters-interviewed analysts anticipate a 75 basis points hike from the European Central Bank. That would indicate a similar rate uptick for the 2nd successive month. Furthermore, it will hint at a potentially slowed hike pace in 2023 Q1.
Meanwhile, the Bank of England will fight the increased inflation with a 0.50% rate hike. That will see investors reacting to the prediction for 2023 hikes. Meanwhile, the central bank can go slow on hiking rates as the UK will likely remain in an economic recession for some time. Also, the Fed will announce its interest rate move this week.
EUR/GBP Prediction
The past few days have had the EURGBP exchange rate in a constricted range. Consequently, the pair consolidates at the 25-d and 50-d Moving Averages. Moreover, it loiters at a crucial support region, a level that has limited downsides in 2022.
The RSI (Relative Strength Index) stayed relatively beneath the 50 neutral. Thus, EUR-GBP can witness bearish breakouts, with sellers eyeing the crucial foothold at 0.8400. Meanwhile, this week’s financial events remain essential for market players.
What are your views about the above article? Moreover, what are you expecting from the economic events-filled week? Feel free to leave your comments in the section area below.
