FX.co ★ EUR/GBP

The euro (EUR) is trading almost flat against the British pound (GBP) on Monday, despite both currencies surging against the US dollar (USD) after the recent US midterm election results. Meanwhile, the GBP is supported by market expectations that the Bank of England (BoE) will raise interest rates next Thursday. At this point, the EUR/GBP cross remains underperforming within a 40-pip range near 18-month lows at 0.8330. Meanwhile, Eurozone data released Wednesday showed EUR prices rising toward three-year highs. This will force the European central bank (ECB) to tighten monetary policy in the coming period. These numbers negate the downgrade in the HCOB October services PMI figures. All eyes are on the BoE in the UK, where the Bank Rate is expected to be hiked by 25 basis points to 4%. Although the UK S&P Global Services PMI was revised downward, it did not affect the pound. The EUR/GBP currency pair is trading at 0.8347, midway through the range it has traded in the past few days, from 0.8320 to 0.8365. Momentum indicators on the 4-hour timeframe are neutral to bullish, as the Relative Strength Index (14) approaches the 50 midpoint while the Moving Average Convergence Divergence (MACD) is slightly positive. However, doji candles on the daily timeframe indicate market indecision. Bulls will need to break above the October 30 and November 2 highs, around 0.8365, to confirm a further correction toward the October 26 high around 0.8400. Meanwhile, the zone between Tuesday's low of 0.8330 and the late March 2025 lows at 0.8315 will be tested by any bearish attempt. Further below, the February 2025 low at 0.8250 seems to be a possible target.