Pre-Interest Rate Decisions: EUR/GBP Looking For Direction

With the imminent rate decisions out of the ECB (expected to cut 50 basis pts) and BOE (expected to cut 50 basis pts), both predicted to cut rates, the pair could continue to range until a macro direction can be formulated. It is however interesting to note that UK rates are expected to be down to .50%, whereas the same cut will bring ECB rates down to only 1.50% and the markets have shown their disdain toward currencies where the central bank has been unwilling to ease and provide as much liquidity as necessary.

In this case the Euro fits the bill and has a lot more chefs in the kitchen, which could make their situation that much harder to fix. Since the NY close we have seen the pair range between the 4-100hr moving average and 4-200hr mavg, a significant break could show the next move ahead of these rate decisions, also note the daily trendline support that could act as a cushion in the event of a Sterling bid.

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