#EURGBP @ 0.88813 has scaled above 0.8880 after a recovery move as bets for further ECB policy tightening is accelerating. (Pivot Orderbook analysis)

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• EUR/GBP has scaled above 0.8880 after a recovery move as bets for further ECB policy tightening is accelerating.
• ECB Knot believes that Eurozone headline inflation has peaked now amid falling energy prices.
• The German HICP is expected to increase to a double-digit figure on an annual basis.

The pair currently trades last at 0.88813.

The previous day high was 0.8911 while the previous day low was 0.8875. The daily 38.2% Fib levels comes at 0.8889, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8897, expected to provide resistance.

The EUR/GBP pair has extended its rebound move from 0.8865 above the critical resistance of 0.8880 in the Asian session. The Euro bulls sensed a buying interest amid escalating hawkish bets for further interest rate decision by the European Central Bank (ECB).

The detailed explanation from ECB policymaker Klaas Knot in an interview with MNI Market cited “Headline inflation has peaked now and the ECB will shift its focus to underlying inflation,” as reported by Reuters. ECB policymakers further stated that the sharp decline in energy prices might continue to weigh pressure on headline inflation. The contraction in economic activities in Eurozone will be shallow and after that, a recovery in activities would provide a cushion to the Consumer Price Index (CPI).

Meanwhile, 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.

On the economic front, investors will actively focus on the release of the German Inflation data. The annual Harmonized Index of Consumer Price (HICP) is seen at 10.0% higher than the former release of 9.6%.

Meanwhile, Pound Sterling bulls are likely to dance to the tunes of the United Kingdom Gross Domestic Product (GDP) (Q4) data. According to the estimates, the preliminary annual GDP data is expected to expand by 0.4% lower than the former release of 1.9%. While the quarterly data is expected to remain flat against a contraction of 0.3%.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8882 at the time of writing. Pair opened at 0.8878 and is trading with a change of 0.05 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 0.8833, 50 SMA 0.8775, 100 SMA @ 0.8748 and 200 SMA @ 0.8641.

The previous day high was 0.8911 while the previous day low was 0.8875. The daily 38.2% Fib levels comes at 0.8889, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8897, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8865, 0.8852, 0.8828
• Pivot resistance is noted at 0.8901, 0.8924, 0.8937

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