EUR is one of the worst performing G10 currencies Wednesday. A streak of lower-than-expected flash CPI report for May from European countries released Tuesday and Wednesday is weighing on the euro. This is because it hints that the ECB may not need to hike as much as previously thought. Nevertheless, money markets are still pricing in rate hikes at the next two ECB meetings.

Wednesday’s underperformance of EUR can be easily spotted while looking at EURGBP chart at D1 interval. We can see that pair has been trading sideways between 0.8670 and 0.8730 levels following a break below the lower limit of a bullish channel. However, 50-session moving average dropped below 200-session moving average painting a bearish pattern known as ‘death cross’ (orange circle on the chart). Pair slumped below the aforementioned 0.8670 area later on and the downward move accelerated afterwards. EURGBP trades at the lowest level since mid-December 2022 and is looking towards a test of the 0.8580 support zone, that saw a number of price reactions throughout 2022. A break below this area would pave the way for a deeper drop with 0.8460 zone being the first potential target. 

EURGBP at D1 interval. Source: xStation5