FxWirePro: EUR/GBP trades directionless, awaits UK CPI and BoE Interest Rate decision next week

Chart - Courtesy Trading View 

EUR/GBP was trading in a narrow 14 pip range, extends sideways at cloud base and 110-EMA. 

The British pound under pressure as banking turmoil clouds rate outlook. Jeremy Hunt's spring budget earlier this week, in which the UK finance minister said the economy would avoid recession this year failed to impress.

Traders attach a strong chance the Bank of England (BoE) would leave UK rates unchanged when it meets next week, with the possibility of a rise of just 25 basis points (bps).

The European Central Bank (ECB) on the other hand went ahead with a hefty 50-basis-point rate hike at its policy meeting on Thursday.

ECB policymakers sought to reassure investors that euro zone banks were resilient and that if anything, the move to higher rates should bolster their margins.

President Christine Lagarde in the statement that followed poured cold water on any pre-determined rate hike expectation by switching to a data-dependent mode.

Support levels:

S1: 0.8739 (Lower BB)

S2: 0.8680 (200-DMA)

Resistance levels:

R1: 0.8768 (110-EMA)

R2: 0.8784 (5-DMA)

Summary: EUR/GBP trades with a bearish technical bias. Momentum is with the bears and volatility is high and rising. Drag till 200-DMA likely. Bearish invalidation only above daily cloud.