The EUR/GBP price is in a consolidation phase ahead of the latest UK consumer and producer inflation data. The EUR to GBP exchange rate is trading at 0.8585, where it has been in the past few days. It has fallen by 1.60% from its highest level last week.
UK inflation data ahead
The euro to pound rate has been in a tight range in the past few days as investors focus on the recent decisions by the BOE and the ECB. In its decision two weeks ago, the European Central Bank decided to leave interest rates unchanged. Officials then pointed to a 0.25% rate hike in the upcoming meeting in July. The goal is to exit negative rates in September.
Still, the hawkish ECB risks plunging Europe to another debt crisis. Last week, the ECB was forced to have an emergency meeting to deal with the widening spread between countries like Germany and Spain. It will continue buying their bonds in the coming months.
The EUR/GBP will next react to the upcoming UK consumer inflation data scheduled for Wednesday morning. Analysts expect the data to show that UK’s inflation surged to 9.1% in May as the cost of oil and gas continued soaring. On the positive side, analysts expect that the headline and core inflation declined on a month-on-month basis. The EUR to GBP will also react to the ongoing rail strike in the UK.
The four-hour chart shows that the EUR to GBP price has been in a tight range in the past few days. The current price is an important level since it struggled moving above it on May 24th and early this month. This price was also along the upper side of the ascending triangle pattern. It is trading along the 25-day and 50-day moving averages while the MACD has moved to the neutral point.
Therefore, the EURGBP forecast is neutral with a bullish bias. A bullish breakout will be confirmed if the price rises above the key resistance at 0.8612. A drop below 0.8560 will signal that there are enough sellers in the market.