EUR/GBP flat lined as investors eye ECB decision

EUR/GBP is trading dead flat around 0.8665 levels as investors wait to see where Draghi will move next.

Will Draghi play it safe?

The ECB is in a near exhausted state while the Eurozone CPI released earlier this week showed a continued rise in inflation. Thus, speculation has gathered pace that Draghi may sound hawkish today.

A potential hawkish tone may not impress markets, which are addicted to Draghi’s dovish talk. It remains to be seen if the central bank bails out doves or marks a major shift in the central bank’s stance by talking hawkish.

EUR/GBP Technical Levels

A break above 0.87 (5-DMA + zero figure) would expose 0.8768 (Jan 13 high), above which the cross could target 0.8852 (Jan 16 high). A move to 0.8852 looks possible if Draghi talks hawkish. On the other hand, a breakdown of support at 0.8640 (100-DMA) would open doors for a sell-off to 0.8583 (Dec 12 high). A violation there would expose 50-DMA support of 0.8532.