EUR/GBP: Cross seen creeping higher – Rabobank

💡 DMK Insight

Rabobank’s take on the Bank of England’s rate hikes is a wake-up call for traders: don’t get too bullish too fast. With the UK labor market showing signs of loosening and growth stagnating, the expectation of three rate hikes seems overly optimistic. Traders should be cautious about positioning for these hikes, especially if economic indicators continue to underperform. If the BoE fails to deliver on these hikes, we could see a significant shift in GBP pairs, particularly against the USD and EUR. Watch for key economic releases in the coming weeks that could confirm or challenge this narrative, especially employment data and GDP figures. Here’s the thing: if the market starts to recalibrate its expectations, we might see a sharp pullback in GBP, which could create buying opportunities for those looking to capitalize on a rebound. Keep an eye on the 1.30 level for GBP/USD as a potential pivot point; a break below could signal a deeper correction.