BoE decision takes centre stage as Euro seeks direction against British Pound

• EUR/GBP approaches 0.8350 as it inches higher, still confined to the previous day's range.
• Although cheaper oil underpins the euro, investors remain reluctant to sell sterling before the BoE's monetary policy decision.
• A small triangle is taking shape in recent price action, according to the technical outlook.

At 0.8344, EUR/GBP is edging higher on Thursday, with a small triangle emerging in recent price action. The euro (EUR) remains within previous days’ trading ranges against the British pound (GBP), however, as investors hold off on investment decisions until the Bank of England’s (BoE) monetary policy meeting concludes later on Thursday. 

Expectations of a 25 basis point increase in the BoE's Bank Rate to 4% following Thursday’s meeting have supported sterling against its major counterparts over the past few weeks. However, the widely anticipated rise could be accompanied by a signal tempering expectations of further monetary tightening. That might disappoint markets and trigger a sharp fall in the pound.

Meanwhile, a steep fall in oil prices is lending support to the euro,  though Thursday’s weaker-than-expected German factory orders have limited the single currency’s recovery.

Technical Analysis: EUR/GBP consolidates within a small triangle   

Following a decline of more than 3% over the previous five weeks, EUR/GBP is consolidating its losses at 0.8345 as price action converges towards the apex of a symmetrical triangle. Indicators point to balanced momentum: on the four-hour chart, the Relative Strength Index (14) sits just below 50, while the Moving Average Convergence Divergence (MACD) is moderately positive, indicating only limited bullish pressure.

Confirmation of a bullish correction would require buyers to clear the triangle’s upper boundary around 0.8350, followed by resistance at 0.8363 (the 2 November high) and 0.8380 (the 28 October high). Below the market, the triangle’s lower boundary stands around 0.8335, with more significant support near 0.8320, the 30 October low. A bearish move beneath that level would turn attention to the late March 2025 lows at 0.8315, followed by the February 2025 low near 0.8250.

(The technical analysis of this story was written with the help of an AI tool. Know more.)