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Pound weakens after softer UK inflation boosts expectations of BoE easing
EUR/USD is consolidating after failing to break 1.1500, with a near term move toward 1.1330–1.1370 flagged by a bearish daily pattern.
The pound stayed under pressure after UK inflation came in weaker than expected, reinforcing market expectations that the Bank of England could turn more accommodative in the coming months, a shift that weighs on sterling, according to Action Forex.
In Europe, the euro traded within a relatively narrow range as investors awaited fresh signals from the eurozone. Attention over the next few days is focused on preliminary Purchasing Managers’ Index releases for Germany, France, the United Kingdom, and the eurozone, with the readings expected to influence expectations for the European Central Bank’s next policy move.
Action Forex also pointed to Middle East tensions and US strikes on targets in Iran as factors supporting demand for traditional refuge assets, including the US dollar, limiting the rebound potential for European currencies. It also highlighted a weekly US initial jobless claims report as another input on US labor market conditions.
On the charts, EUR/USD entered consolidation after failing to test resistance at 1.1500, and technical analysis suggests the pair could decline toward 1.1330–1.1370. For GBP/USD, the outlet said it was in a bearish pullback after buyers failed near 1.3500, with another test of the 1.3320–1.3340 support zone seen as more likely, unless GBP/USD closes above 1.3400.
Latest closeEUR/USD 1.141 ▼0.0%|GBP/USD 1.338 ▼0.4%