Chart of the day - EURGBP (02.03.2023)

11:08 AM March 2, 2023

EUR could be on the move later today when the CPI report for February from the euro area and ECB minutes are released at 10:00 am GMT and 12:30 pm GMT, respectively. CPI reading may draw more attention as it will be more timely - keep in mind that ECB minutes will be a recap of discussions from around 3 weeks ago and therefore views included may be outdated. In fact, many ECB members have struck a hawkish tone since the latest meeting with ECB President Lagarde saying this morning that a 50 bp rate hike at the March meeting is still on the table. This has provided some support for EUR this morning and put some pressure on European equities. Lagarde also said that she does not expect recession in the euro area and that inflation should start to slow from march due to base effects.

Taking a look at EURGBP chart at D1 interval, we can see that the pair has climbed to the 0.8900 resistance zone yesterday. An attempt to break above was made today on the back of Lagarde's comments but those gains were already erased. Nevertheless, another attempt cannot be ruled out given two potential EUR-volatility events later in the day (CPI and ECB minutes). Also the pair may see some action during speeches from ECB Schnabel (12:30 pm GMT), BoE Tenreyro (1:00 pm GMT) and BoE Pill (3:00 pm GMT).

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Source: xStation5

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