

Market Analysis
The EUR/GBP cross is experiencing some selling pressure on Wednesday, retracing part of the previous day’s strong gains and moving closer to a three-month peak reached earlier this week. Despite this, spot prices have recovered slightly from the daily low and are showing modest intraday losses around the 0.8600 level during the early European session.
The Euro gained some traction following the release of German Industrial Production data, which indicated a 1.4% month-on-month increase. This exceeded expectations of a 1.0% rise and reversed the 2.5% decline recorded in May, providing a boost to the EUR/GBP cross. However, the upside potential remains limited due to the European Central Bank’s (ECB) pessimistic outlook on the Eurozone’s economic future and overbought conditions on the daily chart.
Additionally, a modest technical rebound in the British Pound (GBP) is helping to limit the EUR/GBP cross’s gains, which seems to have stalled the strong rally seen over the past four days. The Bank of England’s (BoE) first interest rate cut in over four years—from a 16-year high to 5.0% last Thursday—also contributes to the EUR/GBP cross’s current behavior. This makes it wise to wait for a stronger confirmation of a downturn before concluding that spot prices have reached a peak in the near term.
With no major economic data releases expected from the UK or Eurozone for the rest of the week, attention will turn to the UK’s monthly jobs report and consumer inflation figures scheduled for next Tuesday and Wednesday, respectively. Additionally, the UK GDP print on Thursday could provide significant direction for the EUR/GBP cross. From a technical standpoint, Monday’s breakout above the crucial 200-day Simple Moving Average (SMA) supports the bullish outlook.
Paraphrasing text from "FX Street" all rights reserved by the original author.