See also
28.10.2024 04:32 PM
Following comments from European Central Bank (ECB) board member Pierre Wunsch regarding inflation, the EUR/GBP pair began to gain positive momentum. Wunsch stated that temporary and minor deviations from the inflation target due to energy price fluctuations are acceptable. He also mentioned that discussing the December policy decision is premature, and further monetary easing is not immediately necessary. These remarks are considered a primary factor in supporting the EUR/GBP pair.
Additionally, the rise may be driven by technical buying near the 0.8300 level, which has provided solid support for spot prices since the end of September. However, the pair's growth potential remains limited due to expectations of more aggressive ECB rate cuts, confirmed by a drop in Eurozone consumer inflation below the 2% target for the first time since June 2021 and sluggish economic growth.
On the other hand, the British pound is supported by expectations that the Bank of England's rate cuts will proceed more gradually than in the Eurozone.
With no major economic data scheduled for release today, the pair's volatility and direction remain limited. Traders should await the release of preliminary Consumer Price Index data from Germany and the Eurozone on Wednesday and Thursday, respectively.
From a technical perspective, daily chart oscillators indicate downward momentum, so it is too early to anticipate a recovery in the EUR/GBP pair from its September lows.
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