- EUR/GBP maintains a downward bias, eyes on YTD low amid central bank actions.
- Downside expected due to higher interest rate differential from BoE.
- The upcoming ECB meeting might shift EUR/GBP’s current path; buyers watch the 0.8600 mark.
EUR/GBP finished Thursday’s session with losses though clings to the 0.8580 area, nearby year-to-date (YTD) lows reached on June 1 at 0.8567. At the time of writing, the EUR/GBP exchanges hands at 0.8585, gaining a minuscule 0.01% as the Asian session commences.
EUR/GBP Price Analysis: Technical outlook
The daily chart portrays the EUR/GBP cross pair as downward biased, set to challenge the yearly lows in the near term. Even though both central banks, the European Central Bank (ECB) and the Bank of England (BoE), are hiking rates, the latter is set to finish with a higher interest rate differential. Therefore, further EUR/GBP downside is expected, but next week’s ECB meeting could rock the boat.
Since the path of least resistance is downwards, EUR/GBP sellers must claim the YTD low at 0.8567. A drop below will expose the December 2 swing low of 0.8551, followed by the 0.8500 figure. Once that level is surpassed, the EUR/GBP could tan towards the August 24 low at 0.8408 before challenging the August 2 low of 0.8339.
Conversely, if EUR/GBP reclaims the 0.8600 mark, that could expose the pair to buying pressure. That could lift the cross toward the 20-day EMA at 0.8644 before challenging the 50-day EMA and the figure confluence at 0.8700.
EUR/GBP Price Action – Daily chart
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