EUR/GBP rebounds from 0.8400, but remains sharply lower – Crypto News

• EUR/GBP is climbing on Friday after a dip to the 0.8400 handle.
• ECB soothing talking points are helping to recover sentiment, but only slightly.
• BoE rate call looms ahead next week, but rate moves not expected yet.

EUR/GBP dipped to a fresh 22-month low on Friday, tapping 0.8400 before finding a thin recovery that still leaves the pair battling at the bottom of an accelerating three-month decline from April’s peaks above 0.8600. European political turmoil continues to weigh on the Euro as France heads into a two-round snap election on June 30 and July 7, and Sterling traders are buckling down for the wait to next week’s rate call from the Bank of England (BoE).

Policymakers from the European Central Bank (ECB) have been making the rounds on Friday, attempting to soothe market sentiment as the Euro broadly underperforms as the poorest performer of the major currencies this week. French President Emmanuel Macron has dissolved the French government and sent the country into a snap election in a bid to stop the rise of right-wing contender Marine Le Pen who surged to a stunning victory in European parliamentary elections.

With President Macron’s support evaporating from a populace revolting in the voting booth against unpopular fiscal policies, Le Pen’s platform of steep tax cuts and reduced retirement age has thrust the contender, who has failed three separate bids for the French Presidency since 2012, tries for lucky number four. Financial markets have turned leery on financial stability stemming from political upsets in France, as populist measures meant to buy votes could represent a signficant deficit for the key member of the European Union.

On the Sterling side, GBP traders are settling in for the long wait to next week’s UK Consumer Price Index (CPI) update slated for Wednesday, followed by a fresh rate call from the BoE next Thursday. The BoE’s Monetary Policy Committee (MPC) last voted seven-to-two to keep rate cuts pinned at 5.25%, and although no movement on rates is expected, investors will be keeping an eye out for any further shifts from ‘hold’ to ‘cut’ votes.

EUR/GBP technical outlook 

EUR/GBP tumbled to a fresh 22-month low on Friday, testing the 0.8400 handle before finding intraday technical support and rebounding into the 0.8440 region. Market momentum is firmly tilted towards the bearish side with the pair down -1.2% from June’s peak near 0.8540.

The pair is on pace to close in the red for a fifth consecutive week, and weakness has dragged EUR/GBP into a -2.85% peak-to-trough rut in 2024. A bullish recovery to the 200-day Exponential Moving Average (EMA) at 0.8460 will likely turn back into the low side, and sellers will be looking to definitely push the pair back below the 0.8400 handle.

EUR/GBP daily chart