Today, Thursday, during the European session, the Bank of England's interest rate decision will be announced. Analysts predict that the Bank of England will cut its key rate by 25 basis points, bringing it down to 4.0%. These expectations are putting pressure on the pound against both the euro and the dollar, as the European Central Bank and the Federal Reserve left their rates unchanged in July.

On a global scale, the Bank of England appears to be playing catch-up with other central banks: since August, when the rate-cutting cycle began, it has lowered rates by only 100 basis points, and today's expected cut would bring the total to 125. This is significantly less than the ECB's 235 basis points of easing and roughly comparable to the Fed's 100 basis points.

The key question is whether the Bank of England will follow the ECB's lead or signal further policy easing. In theory, the regulator has room to do so, given the weak pace of economic growth and the tightness of monetary policy (i.e., the gap between the interest rate and inflation).

This could become a turning point for the EUR/GBP pair. It has approached the upper boundary of the two-year range, surpassing the 0.8700 level. A breakout above the resistance level at 0.8753 would open the path to a new range of 0.8753–0.92700, the upper boundary of which acted as resistance from 2016 to 2022.

However, there is still a chance that a moderately hawkish stance from the Bank of England could trigger a pullback from the 0.8753 level. Similar moves occurred in April and last week, but euro buyers twice prevented a full-fledged reversal.

Oscillators on the daily chart remain positive and are far from overbought territory, still reflecting a bullish sentiment. On the four-hour chart, prices are trading above the 100-period SMA, having regained this level last week after a decline. Oscillators on this chart are also in positive territory, further supporting the bullish outlook.