Eurgbp Trades At Weekly Highs

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Eurgbp Trades At Weekly Highs

Eur/Gbp Trades At Weekly Highs Near 0.8574

The EUR/GBP cross has maintained a bullish bias after bouncing from the support near the 0.8530 handle. This marks the 5th day of gains as the cross is seen trading at 2-week highs.

For the next week, the EUR/GBP traders will now be looking forward to how the cross-reacts to the 100 SMA (daily). A break above this dynamic resistance will signify EUR strength against the GBP and open the doors to further gains.

Rate Cuts Expected From Boe

The bigger picture is that the GBP continues to underperform as there's now a higher chance of 4 rate cuts from BoE in 2024. The first-rate cut is expected in June, which could act as a key catalyst for the EUR/GBP.

On the other hand, the GBP bulls seem to have missed the positive UK Construction PMI as EUR/GBP is still trending higher. Meanwhile, the EUR is gaining steam after the positive EU Services PMI for March.

Additionally, ECB member Robert Holzmann has also shared hawkish comments, which push the EUR/GBP higher.

Holzmann is known for his hawkish stance and has made it clear that he is totally against the idea of a rate cut in June. According to Holzmann, more data is needed before the ECB can cut rates.

These comments from Holzmann were taken positively by the EUR/GBP bulls. Meanwhile, the inflation situation in the EU is improving a lot faster than forecast. This has sparked discussions among many experts that rate cuts could happen very soon.

So, that's one factor that is EUR bearish and could put an upper limit to the gains in the EUR/GBP. Hence, it makes sense to take a cautious approach as the dynamics of EUR/GBP are still very volatile.

And if we analyze EUR/GBP from a technical side, any moves beyond the 100 SMA will be faced with strong selling pressure. Next up is the 200 SMA, which is currently present near the 0.8600 level.

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