-
EUR/GBP trades flat near 0.8650 in early North American session.
-
Market sentiment improves ahead of the anticipated Trump–Putin meeting on the Ukraine conflict.
-
Traders await key Eurozone data, including the EU and Germany ZEW Survey, French inflation, and EU GDP figures.
-
In the UK, attention turns to GDP data due August 14, along with Retail Sales and employment figures scheduled earlier in the week.
The EUR/GBP pair remains virtually unchanged as the North American session begins on Monday, trading around 0.8650. Investors are holding steady ahead of a busy week filled with high-impact economic data from both Europe and the UK, while geopolitical optimism continues to support the Euro.
Geopolitical Optimism Supports Euro; Focus Shifts to Inflation and Growth Data
Market sentiment is upbeat, as seen in the performance of Wall Street, though trading volumes remain subdued ahead of Tuesday’s U.S. inflation report. The Euro is finding modest support from positive geopolitical developments, with traders looking ahead to the upcoming Trump–Putin meeting, which may bring renewed momentum in talks to resolve the Ukraine conflict.
On the data front, Italian inflation remained stable at 1.7% year-over-year in July, in line with expectations and unchanged from June. The figure supports the European Central Bank’s (ECB) view that inflation is under control, reducing pressure for further rate hikes. Looking ahead, markets are awaiting the release of the EU and Germany ZEW economic sentiment surveys, French inflation data, and the Eurozone’s second-quarter GDP figures.
In the UK, markets continue to digest last week’s 25 basis-point rate cut by the Bank of England (BoE), which came with a notably hawkish tone. Despite lowering the Bank Rate to 4.00%, the BoE warned that inflation remains above target, while economic growth shows signs of stagnation. The central bank’s updated forecasts point to a stagflationary outlook, increasing focus on upcoming data for further clues.
UK Retail Sales are due on August 12, followed by labor market data and second-quarter GDP figures on August 14. These releases will be critical in shaping expectations for the BoE’s next policy moves.
EUR/GBP Technical Outlook: Neutral to Bearish Bias in the Near Term
Technically, the EUR/GBP has turned neutral to slightly bearish in the short term, following a drop below the 20-day Simple Moving Average (SMA) at 0.8677. A daily close below the 0.8650 level would open the door for further downside, with immediate support seen at the 50-day SMA near 0.8598. A break below that zone could lead the pair toward the 100-day SMA at 0.8535.
On the upside, the first key resistance is located at 0.8700. A breakout above this level would shift momentum back in favor of the bulls, potentially targeting the year-to-date high at 0.8756.
