The decision, however, was passed by a narrow 5–4 margin—highlighting a divided policy committee and casting doubt over the likelihood of further rate cuts, especially as inflationary pressures in the UK continue to mount. June’s consumer price index rose from 3.4% to 3.6%, with the core reading moving from 3.5% to 3.7%. This persistent inflation may prompt policymakers to pause and reassess before initiating further moves, although some analysts still anticipate another cut in the medium term.
In contrast, the eurozone continues to exhibit stability. June’s headline inflation clocked in at 2.0%—right in line with the ECB’s target—while core inflation held at 2.3%. These figures have allowed policymakers to declare victory over high inflation and focus on growth-supportive policy, with markets betting the ECB will resume easing as early as autumn to offset the drag from elevated US tariffs.
Fundamentally, the current dip in EUR/GBP lacks conviction. The underlying backdrop remains supportive for a resumption of the long-term uptrend, provided eurozone stability persists.
Key Support and Resistance Levels
- Support: 0.8606, 0.8545
- Resistance: 0.8728, 0.8789, 0.8850
The pair is currently probing below the 0.8667 pivot (Murray [6/8]), supported by the midline of the Bollinger Bands. A sustained move lower could extend the correction toward 0.8606 (Murray [5/8], lower Bollinger Band) and ultimately 0.8545 (Murray [4/8]). For the bulls, reclaiming 0.8728 (Murray [7/8]) would be a key technical signal, opening the door to higher targets at 0.8789 (Murray [8/8]) and 0.8850 (Murray [+1/8]).
Technical indicators remain mixed. Bollinger Bands are angled upward, the MACD holds steady in positive territory, but the Stochastic oscillator has turned downwards after exiting overbought conditions—suggesting short-term weakness, but not a reversal.
Trading Scenarios and Recommendations
Bullish Scenario: Consider long positions above 0.8728, or on a reversal near 0.8606, targeting 0.8789 and 0.8850. Place stops at 0.8685 or 0.8570, respectively. Expected timeframe: 5–7 days.
| Timeframe | Type | Entry | Take Profit | Stop Loss | Key Levels |
|---|---|---|---|---|---|
| Weekly | BUY STOP | 0.8730 | 0.8789, 0.8850 | 0.8685 | 0.8545, 0.8606, 0.8728, 0.8789, 0.8850 |
| Weekly | BUY LIMIT | 0.8606 | 0.8789, 0.8850 | 0.8570 | 0.8545, 0.8606, 0.8728, 0.8789, 0.8850 |