EUR/GBP remains on the defensive, holds steady above 0.8600 mark – Crypto News – Crypto News
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EUR/GBP remains below mid-0.8400s post-Eurozone/UK PMIs, bulls trying to defend 200 DMA EUR/GBP remains below mid-0.8400s post-Eurozone/UK PMIs, bulls trying to defend 200 DMA

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EUR/GBP remains on the defensive, holds steady above 0.8600 mark – Crypto News

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  • EUR/GBP edges lower on Tuesday, albeit manages to hold above the 0.8600 mark.
  • Expectations for additional ECB rate hikes underpin the Euro and offer support.
  • The fundamental backdrop warrants some caution for aggressive bullish traders.

The EUR/GBP The cross attracts some intraday sellers near the 0.8625 region, albeit lacks any follow-through and manages to hold above the 0.8600 mark through the mid-European session.

The shared currency continues to draw support from rising bets for additional interest rate hikes by the European Central Bank (ECB), which, in turn, is seen as a key factor acting as a tailwind for the EUR/GBP cross. Against the backdrop of the recent hawkish comments by several ECB officials, President Christine Lagarde indicated on Monday that additional interest rate rises were likely as there is no clear evidence that underlying inflation has peaked.

This, in turn, reaffirms expectations that the central bank is not done raising rates despite a fall in inflationary pressures. It is worth recalling that the headline euro zone CPI decelerated more than anticipated to the 6.1% YoY rate in May from 7.0% previous. Moreover, Core CPI slowed down from 5.6% YoY to 5.3% last month. That said, resurgent US Dollar (USD) demand is weighing on the Euro and exerting some pressure on the EUR/GBP cross.

Furthermore, speculations that the Bank of England (BoE) will be far more aggressive in policy tightening to contain stubbornly high inflation further contributes to capping the upside for the EUR/GBP cross. This, in turn, makes it prudent to wait for strong follow-through buying before confirming that spot prices have formed a near-term bottom and positioning for any meaningful recovery from a fresh YTD low, around the 0.8565 region touched last week.

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