Bounce for EURGBP but next moves might depend on data

The euro is down around 1.6% against the pound in 2024 so far with most of that decline within the last month. June’s PMIs were mostly disappointing, raising the probability of another cut by the European Central Bank (‘the ECB’) later this year. The ECB was among the first major central banks to call for a cut at its meeting earlier this month.

The bounce since 14 June seems to be a technical movement primarily. Momentum has been fairly low and there hasn’t been a significant uptick in volume although ATR has reached a new high. The 38.2% monthly Fibonacci retracement around 83.7p is likely to be a strong support if there’s another move lower. To the upside, each of the 20, 50, 100 and eventually 200 SMAs might be important as dynamic resistance.

Germany releases IFO Business Climate and GfK consumer confidence on 24 and 26 June respectively. Either or both of these could drive volatility. Preliminary French inflation on 28 June is less important but if all of these releases are positive there could be more gains for the euro against the pound.

This is my personal opinion which does not represent the opinions of Exness. This is not a recommendation to trade.