#EURGBP @ 0.85807 The Euro tumbles against the Pound Sterling ahead of BoE and ECB’s decisions. (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)]

• The Euro tumbles against the Pound Sterling ahead of BoE and ECB’s decisions.
• EU’s Industrial Production in November was weaker than expected, exerting pressure on the Euro.
• The Bank of England and the European Central Bank are expected to hike rates by 50 bps, favoring the GBP.

The pair currently trades last at 0.85807.

The previous day high was 0.8605 while the previous day low was 0.8562. The daily 38.2% Fib levels comes at 0.8589, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8579, expected to provide support.

The EUR/GBP stalled at the 20-day Exponential Moving Average (EMA) at 0.8622 and retraces below the 0.8500 psychological mark, courtesy of broad Pound Sterling (GBP) strength, ahead of monetary policy decisions by the Bank of England (BoE) and the European Central Bank (ECB) on Thursday. Therefore, the EUR/GBP is trading at 0.8584, below its opening price, at the time of writing.

Sentiment remains optimistic ahead of the Federal Reserve monetary policy decision, as shown by US equities. Aside from this, the Euro (EUR) remains downward pressured against the British Pound (GBP), on the economic outlook of both countries. Although in the Euro area, the economic downturn expected in Germany eased, estimations that Germany and Italy would hit a recession remained due to its dependence on industry and reliance on expensive energy.

In the meantime, the Eurozone economic docket featured November’s Industrial Production (IP) for the bloc, with data coming worse than expected at a 2% contraction, beneath estimates of a 1.5% MoM drop, while year-over-year IP remained unchanged at 3.4%.

In the UK, inflation cooled in November from 11.1% to 10.7%, surprising economists who had expected it to remain flat at 10.9%. However, core CPI was still three times higher than what BoE targets as its goal of 2%. A further decrease may be necessary for households within Britain that have struggled with increasing expenses throughout 2020 due mainly to economic hardships caused by Covid-19 pandemic restrictions.

The Bank of England (BoE) and the European Central Bank (ECB) are expected to hike rates by 50 bps, which would favor the UK. If both central banks increased rates as expected, the BoE would have the upper hand at 3.50% vs. 2.50% by the ECB. Therefore, further EUR/GBP downside is expected, with traders eyeing a clear break below the 200-day Exponential Moving Average (EMA) at 0.8585.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.859 at the time of writing. Pair opened at 0.8599 and is trading with a change of -0.1 % .

The pair is trading below its 20 Daily moving average @ 0.8632, below its 50 Daily moving average @ 0.868 , below its 100 Daily moving average @ 0.8634 and above its 200 Daily moving average @ 0.855

The previous day high was 0.8605 while the previous day low was 0.8562. The daily 38.2% Fib levels comes at 0.8589, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8579, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.8572, 0.8545, 0.8529
• Pivot resistance is noted at 0.8615, 0.8632, 0.8659

[/s2If]
Join Our Telegram Group