Following the German PPI, EUR/GBP declines and closes to 0.8750.

FUNDAMENTAL OVERVIEW

• EUR/GBP retreats from its six-month peak as the Euro faces downward pressure triggered by German PPI data.
• The Bank of England (BoE) might contemplate rate cuts amid subdued UK Retail Sales.

During Monday’s European session, EUR/GBP pulled back from the six-month highs, trading around 0.8750. The Euro weakened following the release of German economic data, where the Producer Price Index (MoM) shows an anticipated 0.1% decline in October. The annual rate also decreases by 11.0%, a milder contraction compared to the previous 14.7%.

Nevertheless, the Euro may find support in the wake of hawkish statements from European Central Bank (ECB) officials last Friday, pushing back against speculations of an imminent rate cut. Joachim Nagel, President of Bundesbank, advised caution against initiating early interest rate cuts. Furthermore, ECB policymaker Robert Holzmann contended that a rate cut in the second quarter would be premature.

Anticipations in the market suggest that the Bank of England (BoE) may contemplate lowering interest rates from their 15-year high due to increasing risks of a recession. The foundation for these expectations solidified with the release of weaker United Kingdom (UK) Retail Sales figures, aligning with a negative outlook for the British economy. Such a situation might provide backing for the Pound Sterling (GBP).

Investors will glean additional insights from the scheduled Bank of England (BoE) Monetary Policy Report Hearings on Wednesday and the European Central Bank (ECB) Monetary Policy Meeting Accounts on Thursday. These events are anticipated to offer valuable indications regarding the future interest rate paths for both countries.

EUR/GBP TECHNICAL ANALYSIS DAILY CHART:

Technical Overview

EUR/GBP is currently trading within an up channel.

EUR/GBP is positioned above all Moving Averages (SMA).

The Relative Strength Index (RSI) is in the buying zone, while the Stochastic oscillator suggests a neutral trend.

Immediate Resistance level: 0.8764

Immediate support level: 0.8736

HOW TO TRADE EUR/GBP

After a decline, EUR/GBP found support, stabilizing, and subsequently traded within a range before breaking out to the upside. Currently exhibiting an upward trend with higher highs, it approaches a crucial resistance zone. A breach of this zone could signal further upward potential.

TRADE SUGGESTION- STOP BUY– 0.8774, TAKE PROFIT AT- 0.8813, SL AT- 0.8751.