EUR/GBP slides to 0.8650 ahead of EU/UK PMIs, ECB monetary policy announcements

• EUR/GBP takes offers to refresh intraday low, consolidates two-week uptrend.
• Optimism about UK job numbers, PM Rishi Sunak’s efforts to restore voters’ confidence weigh on cross-currency pair.
• UK inflation eased but strong Retail Sales underpin need of further BoE rate hikes.
• Preliminary PMIs for July, ECB’s ability to sound hawkish despite announcing widely anticipated 0.25% rate will be crucial to watch.

EUR/GBP consolidates the latest gains as traders brace for the first readings of the Eurozone and the UK PMIs for July during early Monday. In doing so, the cross-currency pair renews its intraday low near 0.8645 to print the mild losses, after rising in the last two consecutive weeks.

Apart from the pre-data positioning, headlines from Bloomberg also lure the EUR/GBP bears by suggesting more inflation pressure within the UK, via the employment sector. The news covered data from the search engine Adzuna to mention that the UK job vacancies rose for a fifth month, boosting salaries and signaling tightness in the labor market that’s likely to fan inflation.

It’s worth noting that the strong UK Retail Sales growth renewed hawkish bias about the Bank of England (BoE) the previous day event as the softer prints of the UK Consumer Price Index (CPI) earlier poked the Pound buyers.

Additionally, the chatters surrounding UK PM Rishi Sunak’s likely measures to ease the pain of British housing markets and taxpayers, mainly to lure voters ahead of 2024 general elections, also seem to weigh on the EUR/GBP price.

On the other hand, mixed comments from the European Central Bank (ECB) officials and unimpressive data from the bloc, as well as chatters that the ECB won’t be able to offer a major hawkish surprise as the 0.25% rate hike is already priced-in, seem to also weigh on the EUR/GBP price.

Moving on, the preliminary readings of the Eurozone, Germany and the UK PMIs for July will be crucial to determine intraday moves of the EUR/GBP pair ahead of Thursday’s key ECB monetary policy announcements. In that case, the pair traders will keep their eyes on how President Christine Lagarde helps keep the hawks safe ahead of a long wait before September monetary policy meeting, after the current one.

Technical analysis

Repeated failures to cross the 100-day Exponential Moving Average (EMA) surrounding 0.8665 directs the EUR/GBP bears toward the previous resistance line stretched from May 23, close to 0.8615 at the latest.