Anna 
In the European session on Monday, the EUR/GBP pair experienced a slight decline to 0.8550 as investors grapple with uncertainty regarding potential interest rate cuts by both the European Central Bank (ECB) and the Bank of England (BoE).
The Eurozone’s preliminary inflation data for February, released last Friday, revealed an annual core inflation rate of 3.1%, surpassing expectations of 2.9%. However, the pace was slightly lower than January’s figure of 3.3%. The monthly core inflation data showed a 0.7% increase after a 0.9% deflation in January, adding to the ambiguity surrounding the timing of rate cuts by the ECB.
Contrastingly, higher inflation in the United Kingdom suggests that the BoE may delay interest rate cuts compared to the ECB. The UK’s inflation currently leads among the Group of Seven (G-7) economies, compelling BoE policymakers to maintain interest rates in restrictive territory for an extended period.
The EUR/GBP pair hovers near the upward-sloping border of an Ascending Triangle pattern, traced on an hourly timeframe since February 23. This pattern, marked by higher lows and flat highs, signifies indecisiveness among market participants with a slight upward bias. The horizontal resistance of the pattern stands at 0.8576, derived from the high on February 22.
The 14-period Relative Strength Index (RSI) oscillates within the 40.00-60.00 range, reflecting a sharp volatility contraction.
A potential bullish scenario may unfold if the pair breaches the resistance at 0.8576, propelling it towards the psychological level at 0.8600, followed by the January 16 high near 0.8620.
Conversely, a weakening of the asset’s appeal could materialize if it drops below the low on February 19 at 0.8537. This downward movement might lead the pair towards the low on February 7 at 0.8516, eventually reaching the psychological support level of 0.8500. As market participants navigate through uncertainties surrounding central bank actions, the technical landscape of the EUR/GBP pair provides key levels to watch for potential trend developments.
