Technically EURGBP I'm looking for Buying opportunity but also fundamentally supports my bullishness Bias.
"Simply put, the ECB just announced the end of a long era," Brzeski said. "Whether this will also be the start of a new era of continuously rising interest rates, however, is still far from certain."
The ECB slashed its growth projection for this year to 2.8% from 3.7%. It raised its outlook for inflation, saying price increases would average 6.8% this year, up from 5.1% in its March forecast.
The bank also increased its crucial inflation forecast for 2024 — to 2.1% from 1.9%. That is significant because it indicates the bank sees inflation as above target for several years, a strong argument for more rate increases.
Now that Q2 has ended, the ECB’s patient approach is seemingly shifting to one open to more aggressive tightening measures. This should (in theory) support the euro which has been resilient against the Sterling amidst several headwinds within the Eurozone including the Russia/Ukraine conflict as well as its concerns with EU periphery bond yields.
The long-term view on the weekly chart shows several long upper wicks recently which may point to short-term downside but these do not take away from the long-term bullish outlook.
"Simply put, the ECB just announced the end of a long era," Brzeski said. "Whether this will also be the start of a new era of continuously rising interest rates, however, is still far from certain."
The ECB slashed its growth projection for this year to 2.8% from 3.7%. It raised its outlook for inflation, saying price increases would average 6.8% this year, up from 5.1% in its March forecast.
The bank also increased its crucial inflation forecast for 2024 — to 2.1% from 1.9%. That is significant because it indicates the bank sees inflation as above target for several years, a strong argument for more rate increases.
Now that Q2 has ended, the ECB’s patient approach is seemingly shifting to one open to more aggressive tightening measures. This should (in theory) support the euro which has been resilient against the Sterling amidst several headwinds within the Eurozone including the Russia/Ukraine conflict as well as its concerns with EU periphery bond yields.
The long-term view on the weekly chart shows several long upper wicks recently which may point to short-term downside but these do not take away from the long-term bullish outlook.