EUR/GBP exhibits volatility contraction ahead of Eurozone Inflation

Source Fxstreet
May 30, 2024 10:06
  • EUR/GBP stays sideways near 0.8500 as investors await the Eurozone Inflation data.
  • The Eurozone inflation data will influence the ECB’s rate-cut path beyond June.
  • Exit polls for UK elections suggest that the Labour Party will come into power.

The EUR/GBP pair trades inside Wednesday’s trading range in Thursday’s session, reflecting indecisiveness among market participants ahead of the release of the preliminary Eurozone inflation data for May, which will be published on Friday.

Investors remain certain about the European Central Bank (ECB) to begin reducing interest rates from the June meeting. Therefore, financial markets are discussing about how fast and far the ECB will cut interest rates beyond June. Majority of ECB policymakers have advocated for a gradual rate-cut approach to limit risks of inflation revamping again.

For fresh guidance on the interest rate outlook, investors await the Eurozone inflation data. Economists expect that annual Harmonized Index of Consumer Prices (HICP) rose at a stronger pace of 2.5% from the prior reading of 2.4%. The annual core HICP is estimated to have accelerated to 2.8% from 2.7% in April.

Hotter-than-expected inflation data would weaken speculation for the ECB deploying an aggressive policy easing approach. While soft numbers would prompt expectations that the ECB will announce subsequent rate cuts.

This week, investors have shifted focus to the United Kingdom (UK) election campaigns due to the absence of top-tier economic data. Exit polls show that the Labour Party will come in power after almost 15 years. The Pound Sterling could remain slightly volatile due to market expectations for elections but its impact on the monetary policy is expected to light.

The outlook of UK economy will change drastically if the Labour Party comes into power but their fiscal plans are expected to remain conservative to avoid any upside risk to price pressures.

EUR/GBP

Overview
Today last price 0.8506
Today Daily Change 0.0001
Today Daily Change % 0.01
Today daily open 0.8505
 
Trends
Daily SMA20 0.8558
Daily SMA50 0.8563
Daily SMA100 0.8557
Daily SMA200 0.8603
 
Levels
Previous Daily High 0.8517
Previous Daily Low 0.8484
Previous Weekly High 0.8568
Previous Weekly Low 0.85
Previous Monthly High 0.8645
Previous Monthly Low 0.8521
Daily Fibonacci 38.2% 0.8497
Daily Fibonacci 61.8% 0.8504
Daily Pivot Point S1 0.8487
Daily Pivot Point S2 0.8469
Daily Pivot Point S3 0.8454
Daily Pivot Point R1 0.852
Daily Pivot Point R2 0.8535
Daily Pivot Point R3 0.8553

 

 

Disclaimer: For information purposes only. Past performance is not indicative of future results.
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