Trading idea for EUR/GBP on March 1, 2024
EUR/GBP continues to consolidate near the 0.8550 level. For the second day in a row, there is zero dynamics of the asset, as market participants expect new drivers to appear that affect trading.
Yesterday's preliminary data on the harmonized index of consumer prices in Germany for February showed a slowdown in inflation from 3.1% to 2.7% (YoY), Meanwhile, core inflation (excluding food and energy prices), which the European Central Bank (ECB) focuses on when planning the course of monetary policy, It decreased in February from 2.9% to 2.5%, against the analysts' forecast of 2.6%. A decrease in the growth rate of core inflation may suggest the possibility of an early easing of the ECB's policy, especially given Christine Lagarde's hints of a possible rate cut in the coming months. Inflation data in the Eurozone will be presented today. Analysts expect a decrease in the consumer price index from 2.8% to 2.5%, which will further increase the likelihood of an easing of the ECB rate. In this regard, the euro may come under pressure, strengthening the development of the current bearish trend.
In the context of British statistics, data published on Thursday indicate an increase in the total volume of consumer loans in England by 1.877 billion pounds in January, which exceeds forecasts of 1.600 billion pounds. The number of approved mortgage loans reached 55.23 thousand, which is the highest figure since 2022. The growth in lending indicates the adaptation of British households to the current levels of the key interest rate and provides the Bank of England with an opportunity to focus on fighting inflation, without rushing to adjust monetary policy. In this context, the contrast in monetary approaches between the ECB and the Bank of England may become the main factor supporting the further decline of the EUR/GBP pair. We suggest that you include a new order in the trader's transaction diary
- Sell-Stop 0.8520
- Take-profit 0.8400
- Stop-loss 0.8560.