EURGBP Points Higher Ahead Of BOE Decision on Thursday

Summary:
• EURGBP gives up early gains as traders focus on the meeting of UK PM Johnson with European Commission (EC) President Ursula von der Leyen and EC President

EURGBP gives up early gains as traders focus on the meeting of UK PM Johnson with European Commission (EC) President Ursula von der Leyen and EC President Charles Michel to discuss the Brexit negotiations ahead of the July 1 deadline. The talks will focus on a possible extension of the transition period, which expires at the end of 2020. This extension needs to finalized before July 1.

What to Expect from Bank of England June Meeting

Investors will also focus on Bank of England decision on Thursday with expectations pointing to an increase of 100 billion to the bond-buying programme. Andrew Bailey, the Governor of Bank of England, has reiterated that the Bank is ready to make more to help the UK’s economy to fight the coronavirus damage. Economists expect the BOE to keep interest rates unchanged, but still, there is speculation that the Bank might soon move interest rates below the zero mark.

Economic data continue to disappoint. The European Monetary Union Trade Balance seasonally adjusted came in at €1.2B below the forecasts of €22.9B in April. The EMU Trade Balance reported at €2.9B, below consensus of €15.9B.

Meanwhile, the German Economy Ministry warned that the second-quarter economic output would decline more sharply than in the first quarter of 2020.

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EURGBP Price Analysis   

EURGBP is 0.06% higher at 0.8977, having hit earlier today two-week highs, but as of writing gave up the early gains and returned to the unchanged mark. The technical picture for EURGBP is bullish as long as the pair trades above the major daily moving averages.   

On the upside, initial resistance for EURGBP stands at 0.9024 the daily high. A break above 0.9024 might test the next obstacle at 0.9057 the high from May 29 trading session. If the EURGBP breaks higher, then might challenge the next supply zone at 0.9089 the high from March 27. 

On the flip side, the first support for EURGBP stands at 0.8970 the daily low. A close below 0.8970 might challenge the next support area at 0.8917 the low from June 11 trading session. More support for the pair might emerge at 0.8835 the 50-day moving average.