The EUR/GBP cross struggles to overcome the 100-day Simple Moving Average (SMA) hurdle, encountering supply on Tuesday and maintaining depressed spot prices near the 0.8575 region during the first half of the European session. This marks a break in the seven-day winning streak.
The British Pound (GBP) demonstrates relative outperformance against the Euro, possibly due to upbeat domestic data. Like-For-Like Retail Sales surged by a 3.2% year-on-year rate in March, surpassing expectations of a 1.8% rise and representing the strongest growth since August 2023. This robust performance exerts downward pressure on the EUR/GBP cross.
Additionally, speculations surrounding a potential interest rate cut by the European Central Bank (ECB) due to a faster-than-expected decline in Eurozone inflation undermine the Euro, contributing to the bearish tone surrounding the pair. Conversely, expectations for at least four interest rate cuts by the Bank of England (BoE) this year, commencing in June, may limit the GBP’s gains and provide support to the EUR/GBP cross.
Traders are advised to exercise caution before anticipating further downward movement, especially in the absence of pertinent economic data releases from either the UK or the Eurozone on Tuesday. Attention remains on the appearance of BoE Governor Andrew Bailey, which could influence the Sterling Pound and potentially provide momentum to the EUR/GBP cross. However, market focus is anticipated to shift towards the monthly UK GDP print and factory data for February, scheduled for release on Friday.
