In particular, I’d keep an eye out on EUR/GBP as the pair threatens a push past its 100-day moving average (red line) especially with rate hike odds firming up for the ECB going into tomorrow:
EUR/GBP daily chart
The data here highlights the biggest monthly UK GDP decline since December 2022, with all sectors of the economy faltering. The surprise is of course the services sector, which contributed the largest fall, as it comes amid a time when tourism and business activity should pick up amid the summer time.
All of this just rebuffs the narrative that the BOE is in a rather tough spot at the moment as stagflation risks continue to grow. The economy is already taking a hit and they will have a tough job to navigate a soft landing, especially since they still need to raise interest rates again to counter inflation pressures.
Cable is also down 0.2% on the day to 1.2460 and looks set to retest the month’s lows with the 200-day moving average (blue line) a key support line to watch, especially with the US CPI report coming into focus later today as well.
GBP/USD daily chart