EURGBP hits new multi-month low ahead of UK CPI data, BoE policy meeting

The cross remains at the back foot on Monday and hit new 2023 low (0.8518) also the lowest since 19 Aug 2022.

Sterling continues to rise on expectations for another BoE rate hike, as the MPC meets on Thursday and widely expected to deliver another rate hike.

The central bank is expected to raise interest rates by 25 basis points in the 13th consecutive time and push borrowing cost to 4.75% (the highest in 15 years.

Sticky inflation keeps the UK policymakers at high alert, with growing expectations among traders that interest rates might rise as high as 6% in 2023.

UK inflation report is due on Wednesday, with annualized inflation expected to ease to 8.5% in May from 8.7% previous month, but closely watched core CPI is expected to stay unchanged at 6.8% in May, warning that underlying inflation remains elevated without signs of easing.

Daily studies are in full bearish setup, although oversold conditions may produce headwinds and slow bears, en-route to next target at 0.8456 (Fibo 76.4% of 0.8202/0.9278).
Broken 100DMA (0.8580) should cap upticks.

Res: 0.8580; 0.8613; 0.8658; 0.8684
Sup: 0.8500; 0.8456; 0.8407; 0.8339