FxWirePro: EUR/GBP refreshes 5-month high ahead of BoE/ECB policy meetings, bias bullish

Chart - Courtesy Trading View 

Spot Analysis:

EUR/GBP was trading 0.32% higher on the day at 0.8907 at around 09:30 GMT.

Previous Week's High/ Low: 0.8852/ 0.8751

Previous Session's High/ Low: 0.8883/ 0.8803

Fundamental Overview:

The single currency remains bid ahead of the European Central Bank's (ECB) policy decision.

Markets have priced in a 50 bps rate raise by the central bank and focus will be on press conference by Chairwoman Lagarde.

Any forward guidance by the central bank, in a context of still high inflation, energy crunch and now diminishing recession fears will be closely watched.

On the data front, Germany’s trade surplus shrank a tad to €10B in December, as per data released earlier on thursday. 

On the other side, Bank of England (BoE) is set to push interest rates to 4% in its battle against the double-digit inflation figure.

Analysts remain negative on the UK economic front as higher interest rates by the Bank of England (BoE) have impacted the extent of economic activities dramatically.

Inflationary pressures still remain outside the grip of the BoE policymakers and the 50 bps hike may also prove ineffective. 

Technical Analysis:

- GMMA indicator shows major and minor trend are bullish

- Momentum is bullish and volatility is high and rising

- Price action is above cloud and volatility is high and rising

- MACD confirms bullish crossover on signal line and ADX supports upside

Major Support and Resistance Levels:

Support - 0.8826 (5-DMA), Resistance - 0.8905 (Upper BB)

Summary: EUR/GBP trades with a bullish technical bias. Central bank actions to influence price action. Scope for test of fresh multi-month highs above 0.89.