EUR/GBP relinquishes recent advances：
EUR/GBP experienced an unusual uptick on Friday amid easing tensions between Israel and Iran. Furthermore, Deputy Governor Dave Ramsden of the Bank of England expressed expectations for a significant decline in inflation towards the target in the upcoming months, signaling a dovish stance to the market.
Attempting to counter such sentiments, Chief Economist Huw Pill of the BoE emphasized the importance of maintaining a restrictive policy stance. However, he echoed Ramsden’s views, acknowledging indications of a downward shift in the persistent component of the inflation dynamic.
Following the release of PMI data, EUR/GBP encountered resistance near 0.8625 and subsequently retreated, even breaching the 200-day Simple Moving Average (SMA). A potential return to the previous channel resistance at 0.8578 is conceivable. Prices consolidated within the trading range as central bankers assessed incoming data, with the likelihood of an initial rate cut appearing distant.
Looking ahead, the European Central Bank is poised to lower rates in June, suggesting that sterling will retain its interest rate advantage, potentially leading the currency pair to test familiar support levels in the long term.
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