#EURGBP @ 0.86251 is sideways in a 40-pip range broadly ahead of German Retail Sales. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• EUR/GBP is sideways in a 40-pip range broadly ahead of German Retail Sales.
• A surprise decline in Eurozone inflation has weakened hawkish ECB bets.
• The sentiment of UK households was dampened as food inflation soared to a 45-month high.

The pair currently trades last at 0.86251.

The previous day high was 0.8661 while the previous day low was 0.8621. The daily 38.2% Fib levels comes at 0.8636, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8646, expected to provide resistance.

The EUR/GBP pair has picked bids after dropping to near 0.8620 in the Asian session. The asset is broadly sideways in a 0.8620-0.8660 range for the past three trading sessions despite a decline in the Eurozone Harmonized Index of Consumer Prices (HICP). A recovery move in the cross is feeble for now and requires more filters for being a stronger one.

On Wednesday, the headline Eurozone HICP released lower at 10.0% than the expectations of 10.4% and the prior release of 10.6%. Ease in energy prices after electrifying moves resulted in a slowdown in inflationary pressures while food prices are still solid in the Eurozone economy. The core HICP numbers remained flat at 5.0% due to supply chain bottlenecks.

Meanwhile, the European Central Bank (ECB) policymakers are worried about increments in wages. At a point of time, when inflationary pressures will cool down higher wages will stay, which could de-anchor long-term inflation expectations.

A decline in the preliminary November inflation report has cemented a drop in rate hike extent to 50 basis points (bps) as suggested by Commerzbank.

Also, an unfavorable German unemployment report is supporting a decline in an interest rate hike by the ECB in its December monetary policy meeting.

Going forward, investors will keep an eye on German Retail Sales data. The economic data is expected to expand its contraction to 2.8% vs. a prior contraction of 0.9% on an annual basis. Also, monthly figures are expected to contract by 0.6% against an expansion of 0.9%. A decline in retail demand will delight ECB policymakers.

On the United Kingdom front, 45-year high annual growth in food inflation to 12.4% in November, released by the British Retail Consortium (BRC), has dampened sentiment of households as they will be unable to offset higher food prices with subdued earnings.

Responding to the figures, BRC chief executive Helen Dickinson said: “Winter looks increasingly bleak as pressures on prices continue unabated”, as reported by Financial Times. This might impact Pound Sterling ahead.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8633 at the time of writing. Pair opened at 0.8633 and is trading with a change of 0.0 % .

The pair is trading below its 20 Daily moving average @ 0.8697, below its 50 Daily moving average @ 0.8722 , above its 100 Daily moving average @ 0.8624 and above its 200 Daily moving average @ 0.8538

The previous day high was 0.8661 while the previous day low was 0.8621. The daily 38.2% Fib levels comes at 0.8636, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8646, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8616, 0.8598, 0.8576
• Pivot resistance is noted at 0.8655, 0.8678, 0.8695

[/s2If]
Join Our Telegram Group