Snapshot: EUR/GBP is trading around 0.8535, down 0.2% in early trade, driven by persistent hawkishness from the Bank of England relative to the ECB. The UK unemployment rate’s surprise drop to 4.9% continues to support Sterling, overshadowing earlier CPI concerns.
- Watch 0.8500; a break confirms the bearish trend.
- Risk: Services CPI re-acceleration could revive EUR bids.
Bias into NY: Short EUR/GBP while UK wage growth remains sticky and services inflation elevated. Expect a test of 0.8500 driven by diverging central bank policy paths, with a dovish pivot from the ECB (last cut 25bp on April 17) contrasted against the BoE’s reluctance to commit to a cut path.