The EUR/GBP currently trades at 0.8540
In Thursday's session, the EUR/GBP pair is seen at 0.8540, posting modest gains. The pair is receiving pressure from a dovish stance by the European Central Bank (ECB), tipping rate cut odds for April. Meanwhile, GBP maintains its undercurrent due to the Bank of England (BoE) monetary policy which seems to be pushing the easing cycle to June. Adding to that, markets currently price in about 65% odds for rate cuts to commence in April, predicting 125 bp worth of easing this year, despite ongoing resistance from ECB officials.
On the other hand, for the BoE, investors anticipate about 100 bp of rate cuts in the next 12 months, beginning in June due to the recent economic figures which suggest that the British economy remains resilient. Moreover, as long as the UK's economy continues to show strength and markets delay the BoE's interest rate cuts, the cross may see further downside. The daily chart indicators indicate a possible dominance of buying momentum. The Relative Strength Index (RSI) is on a positive slope but in negative territory, revealing an increasing strength of the buying force. Concurrently, the Moving Average Convergence Divergence (MACD) shows rising green bars, suggesting that the bullish sentiment is taking hold. However, it's crucial to note that the pair is currently trading under the 20, 100, and 200-day Simple Moving Averages (SMAs), pointing towards the prevailing strength of the bears in a broader perspective. This situation proposes a challenging scenario for the buyers, despite the recent signs of a bullish recovery.