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>>The EUR/GBP rate faces a crucial test, as forthcoming BoE testimony could reshape the direction of monetary policy.

The EUR/GBP rate faces a crucial test, as forthcoming BoE testimony could reshape the direction of monetary policy.

crypthub

about 4 hours ago

Market Outlook

EUR/GBP is poised for a decisive move as the Bank of England testimony could reshape interest‑rate expectations. Traders focus on the surprising UK inflation rise and the likelihood of a policy tone shift. A hawkish stance may drive the pair toward 0.8500, while dovish comments could lift it to around 0.8700. Institutional trading volume has risen ahead of the hearing, signalling heightened anticipation.

Technical Snapshot

The pair trades between 0.8550 and 0.8650, with the 50‑day moving average providing support near 0.8575 and resistance at 0.8650. RSI sits at 52, indicating neutral momentum, and Bollinger bands have contracted, often preceding volatility spikes. Fibonacci analysis highlights 0.8620 as a key resistance level; a sustained break may target 0.8700. Past parliamentary appearances have generated average daily moves of about 0.8%.

Policy Divergence and Risks

The BoE kept its benchmark at 4.75% despite February inflation climbing to 3.2%, above the 2% target, while the ECB holds its deposit rate at 3.75% with a more gradual tightening path. This policy gap fuels euro‑sterling differentials and raises the stakes for the testimony. Expected market volatility is rising, with one‑week implied volatility at its highest since December 2024. Historical patterns show that most of the price adjustment settles within 48 hours, so risk management is essential.