EUR/GBP bulls await the BoE and hope for a surprise

• EUR/GBP has been making a profound advance to the upside int he rising channel on the daily sticks, up to test the 0.8920 resistance with a high of 0.8919 so far on Monday.
• Currently, the pair is trading at 0.8917 from a low of 0.8880.  

German state CPI mostly beating expectations and prior readings although was largely ignored and it was more about a softer dollar where the pound is the laggard in the trio.  EUR/GBP is catching the usual last-minute bid as month-end approaches and has scored the highest level since July 24th.

BoE forecast:

All eyes are on the BoE this week and if there is a surprise hold or a very dovish rate hike, this could be the nail in the coffin for the pound that will allow the pessimism over Brexit through the floodgates.  

“We expect Bank of England (BoE) policymakers to raise interest rates at the 2 August Monetary Policy Meeting (MPC), taking Bank Rate up to 0.75% from 0.50% – only the second rate hike since the global financial crisis. The market agrees, currently, pricing in about a 90% chance of a rate hike in August,” analysts at Standard Chartered Bank argued explain that the economic data released since the June policy meeting have reinforced this view, particularly the bounce back in GDP growth and improving business survey data.

EUR/GBP levels

 The cross has moved out of phase of consolidation and now above the 10-D SMA at 0.8904 after bouncing off the 21-D SMA at 0.8871 that acts as a support. On continued Brexit angst, the 0.9034 October 2017 high on the wide will come in as the key upside target.    Below the 21-D SMA, bears can target the 0.8720 triangle lows and the double bottom lows at 0.8697. 0.8620 protects a run towards 0.8526 as being the 78.6% retracement of the move from 2017 on the wide.