#EURGBP @ 0.89010 is aiming to extend gains after a recovery move as ECB policymakers favor one more 50 bps rate hike ahead. (Pivot Orderbook analysis)

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• EUR/GBP is aiming to extend gains after a recovery move as ECB policymakers favor one more 50 bps rate hike ahead.
• Preliminary German HICP
• is expected to escalate to 10.0% from the former release of 9.6% on an annual basis.
• UK Sunak considered a cabinet mini re-shuffle to split Shapps’s Department for Business, Energy, and Industrial Strategy.

The pair currently trades last at 0.89010.

The previous day high was 0.8966 while the previous day low was 0.8915. The daily 38.2% Fib levels comes at 0.8935, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8947, expected to provide resistance.

The EUR/GBP pair has picked demand after dropping below the round-level cushion of 0.8900 in the early Tokyo session. The cross is aiming to extend its recovery as bets for more interest rate hikes by the European Central Bank (ECB) in its upcoming monetary policy are mounting vigorously.

Annual inflation in Eurozone has softened significantly to 8.5% as the European Central Bank (ECB) is continuously hiking interest rates. Supply chain disruptions are easing now along with energy prices. Despite a win-win situation for the Eurozone inflation, ECB President Christine Lagarde is expected to remain hawkish ahead.

Isabel Schnabel, a Member of the European Central Bank (ECB)’s Executive Board, wrote in a press release entitled, ‘Monetary policy in times of pandemic and war’ that inflation momentum remains ‘quite elevated,‘ but cannot give all clear on inflation yet and that the ECB Intends to raise rates by 50bps in March.

For guidance on Eurozone inflation, ECB policymaker Francois Villeroy de Galhau said on Tuesday that the Eurozone was not very far from the peak of inflation, as reported by Reuters. He further added “I don’t think we have to choose between fighting inflation and avoiding a recession,”

On Wednesday, investors will keenly focus on the German inflation data. The preliminary German Harmonized Index of Consumer Prices (HICP) (Jan) is expected to escalate to 10.0% from the former release of 9.6%.

Meanwhile, Pound Sterling is likely to dance to the headlines of a mini cabinet re-shuffle by United Kingdom PM Rishi Sunak after completing his stressed 100 days of work. Sunak will appoint a new Conservative Party chair, after he sacked Nadhim Zahawi over a tax scandal more than a week ago, as part of a wider overhaul, officials told Cabinet ministers Monday, as reported by Bloomberg.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8902 at the time of writing. Pair opened at 0.8924 and is trading with a change of -0.25 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 0.8828, 50 SMA 0.8764, 100 SMA @ 0.8745 and 200 SMA @ 0.8636.

The previous day high was 0.8966 while the previous day low was 0.8915. The daily 38.2% Fib levels comes at 0.8935, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8947, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8904, 0.8884, 0.8853
• Pivot resistance is noted at 0.8955, 0.8987, 0.9007

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