EUR/GBP

A quick look at the charts suggests the British pound might be nearing a burst of energy, and that could be beneficial for GBP/USD bulls or EUR/GBP bears.

Gold and oil were higher in Monday’s Asian session in response to weekend news that Israel had declared war against Hamas. With the potential that this could spread into a wider Middle East conflict, gold sucked in safe haven flows whilst oil was higher on supply concerns.

With the US dollar having fallen for three days ahead of today's PCE inflation report, we're going to need to see some soft numbers for the US dollar to move materially lower from here. So could that could leave an upside surprise and subsequent rally for the US dollar if inflation is hotter than liked? Either way, 1.0900 is likely to be pivotal level for EUR/USD today, and a host of European data points also puts EUR/GBP into focus ahead of the inflation report.

GBP/USD looks to US data for clues on the Fed’s next move. EUR/GBP holds steady ahead of German inflation.

Rising yields and a stronger US dollar weighed heavily on EUR/USD yesterday, which came very close to a break of key support. And if price action on EUR/GBP is anything to go by, a breakdown on EUR/USD may be on the horizon.

The US had their credit rating downgraded for their second time in history by Fitch on Tuesday night, although the relatively muted market reaction suggests there may not be much of a bearish follow-through. With that said, perhaps Asian trade is not quite sure what to make of the headline and we’ll see the real commotion in today’s European and US sessions.

EUR/GBP rises ahead of the BoE rate decision. USD/JPY is supported by BoJ-Fed divergence.

EUR/GBP looks to a new Brexit deal. Gold falls ahead of US durable goods orders.

Both EUR/GBP and EUR/GBP are hugging various pivot points ahead of the open, but whichever way they break initially our bias is for a break to new lows.

EUR/GBP sold off aggressively after the UK posted a stronger flash PMI than that of the Euro Area.

The publication of stronger European data again suggests that the eurozone and UK economies remain surprisingly resilient despite high levels of inflation.

EUR/USD falls post US CPI & ahead of retail sales. EUR/GBP rises after weaker-than-forecast UK inflation.

With the Fed having delivered their 25bp yesterday, it is now over to the BOE and ECB today who are expected to hike by 100bp between them.

USD/CAD falls ahead of the BoC rate decision. EUR/GBP rises ahead of German IFO business climate data.

..especially against currencies where the central bank is deemed to be slightly more dovish than the ECB

Investors have been reducing some of the risks they had built into asset prices, including a sharp recession and energy crunch.