The EUR to GBP (EURGBP) pair rose slightly after the ECB delivered its interest rate decision. The pair also reacted to the UK employment numbers and the upcoming EU leaders meeting scheduled for tomorrow. The pair is trading at 0.9085, which is slightly below Tuesday’s high of 0.9115.
ECB interest rate decision
As I wrote earlier today, analysts were not expecting any major changes in today’s interest rate decision by the European Central Bank (ECB). The bank left interest rate unchanged as most traders were expecting. It also left the quantitative easing program unchanged. It expects to retain these policies for as long as they are required.
Fortunately, the policies have worked to a large extent as evidenced by recent economic numbers. The services and manufacturing PMIs have bounced back, people are buying more, and many companies have started to hire again.
Nonetheless, the biggest news for the EURGBP pair will the recovery fund meeting that will happen tomorrow. The goal of this meeting is to deliberate on the 750-billion-euro fund that was proposed by the European Commission in May. Analysts are optimistic that the two opposing sides will come to a deal. They believe that Angela Merkel, who is widely respected, will be able to convince he frugal four members.
The EURGBP pair will react to UK retail sales numbers that will come out tomorrow. Analysts expect that the numbers will show that the sector remained being vibrant as more businesses reopened. These numbers will come days after some impressive employment and inflation numbers from the UK. The EUR to GBP pair will also move due to the inflation numbers from Europe.
EUR to GBP technical outlook
The EURGBP pair is trading at 0.9083. On the daily chart, the price is slightly above the 50-day and 100-day EMAs. The price is also above the 61.8% Fibonacci retracement level. It is also above the ascending trend line that is shown in green below. Also, it is forming a bullish pennant pattern. Therefore, the pair is likely to continue rallying as bulls target the next resistance level at 0.9175. This price is the highest it has been since June 29.
On the flip side, a move below 0.9000 will invalidate this trend. This is an important psychological level that is also slightly below the 61.8% retracement level.