#EURGBP @ 0.87605 has found a short-term cushion near 0.8750 as the impact of the ECB’s smaller rate hike has started fading. (Pivot Orderbook analysis)
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- EUR/GBP has found a short-term cushion near 0.8750 as the impact of the ECB’s smaller rate hike has started fading.
- Eurozone’s subdued growth rate and reduced loan disbursement forced ECB to go light on interest rates.
- The BOE is expected to raise interest rates consecutively for the 12th time to curb stubborn inflation.
The pair currently trades last at 0.87605.
The previous day high was 0.8835 while the previous day low was 0.8796. The daily 38.2% Fib levels comes at 0.8811, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.882, expected to provide resistance.
The EUR/GBP pair has gauged intermediate support after a sheer sell-off to near 0.8760 in the early Tokyo session. The cross witnessed a massive decline on Thursday after the European Central Bank (ECB) hiked interest rates by 25 basis points (bps) to 3.25%. ECB President Christine Lagarde made very clear that the policy-tightening spell is not concluded yet and more than one additional rate hikes are in the pipeline.
Investors were split about the pace at which the ECB will hike interest rates amid recent developments in Eurozone banking figures. In a recently published Bank Lending Survey (BLS), the European Central Bank (ECB) noted that a net 38% of Eurozone banks reported a fall in demand for credit from companies in the first quarter of the year. Also, banks have tightened their credit conditions amid a volatile environment. ECB stated, “The general level of interest rates was reported to be the main driver of reduced loan demand, in an environment of monetary policy tightening.”
Meanwhile, the Eurozone economy posted a minimal growth rate of 0.1% in the first quarter. Subdued growth rate and reduced loan disbursement confirmed that the ECB is in the right direction so that the pace could be reduced to save the economy from falling into recession.
Analysts at Danske Bank stated, “The ECB is not done hiking and President Lagarde clearly said that its data-dependent approach warranted further hikes at the current outlook. We add a 25bp hike in September as well to our rate call, thereby keeping our 4% peak policy.”
On the Pound Sterling front, the Bank of England (BoE) is preparing for more interest rate hikes as United Kingdom’s inflation is showing reluctance for ditching the double-digit territory. BoE Governor Andrew Bailey is expected to raise interest rates consecutively for the 12th time to curb stubborn inflation. An interest rate hike by 25 basis points (bps) is widely expected, which will push borrowing costs to 4.5%.
Technical Levels: Supports and Resistances
EURGBP currently trading at 0.876 at the time of writing. Pair opened at 0.8804 and is trading with a change of -0.5 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 0.8760 |
| 1 | Today Daily Change | -0.0044 |
| 2 | Today Daily Change % | -0.5000 |
| 3 | Today daily open | 0.8804 |
The pair is trading below its 20 Daily moving average @ 0.8813, below its 50 Daily moving average @ 0.8814 , below its 100 Daily moving average @ 0.882 and above its 200 Daily moving average @ 0.8728
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 0.8813 |
| 1 | Daily SMA50 | 0.8814 |
| 2 | Daily SMA100 | 0.8820 |
| 3 | Daily SMA200 | 0.8728 |
The previous day high was 0.8835 while the previous day low was 0.8796. The daily 38.2% Fib levels comes at 0.8811, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.882, expected to provide resistance.
Note the levels of interest below:
- Pivot support is noted at 0.8788, 0.8772, 0.8749
- Pivot resistance is noted at 0.8828, 0.8851, 0.8867
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 0.8835 |
| Previous Daily Low | 0.8796 |
| Previous Weekly High | 0.8875 |
| Previous Weekly Low | 0.8765 |
| Previous Monthly High | 0.8875 |
| Previous Monthly Low | 0.8729 |
| Daily Fibonacci 38.2% | 0.8811 |
| Daily Fibonacci 61.8% | 0.8820 |
| Daily Pivot Point S1 | 0.8788 |
| Daily Pivot Point S2 | 0.8772 |
| Daily Pivot Point S3 | 0.8749 |
| Daily Pivot Point R1 | 0.8828 |
| Daily Pivot Point R2 | 0.8851 |
| Daily Pivot Point R3 | 0.8867 |
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