#EURGBP @ 0.87055 falls from a 5-month high of 0.8754, currently trading at 0.8705.

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• EUR/GBP falls from a 5-month high of 0.8754, currently trading at 0.8705.

The pair currently trades last at 0.87055.

The previous day high was 0.8741 while the previous day low was 0.8708. The daily 38.2% Fib levels comes at 0.8728, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.872, expected to provide resistance.

The EUR/GBP falls from a 5-month high reached earlier in the European session, at 0.8754, but has retreated after the Eurozone’s (EU) economy contracted while inflation cooled. Therefore, speculations are mounting that the European Central Bank (ECB) might finish raising rates. The cross exchanges hands at 0.8705.

During the European session, the EU revealed that inflation dipped below the 3% threshold in October, according to Eurostat, with prices rising to 2.9%, below the 3.1% expected and well beneath the September 4.3% jump. Given that data justifies the ECB’s pausing rates last week, money market futures estimate the first rate cut is expected in the first half of 2024.

Nevertheless, not everything is good news for the bloc, as the Gross Domestic Product (GDP) for Q3 missed forecasts of 0%, at -0.1%. despite that, some ECB officials continued to keep the door open for additional tightening, as Joachim Nagel from the Bundesbank noted, “Our tight monetary policy is working, but we must not let up too soon.” He stated that rates need to be at a sufficiently high level for a long time.

On the UK front, the Bank of England is expected to keep rates unchanged at a 15-year high of 5.25% on November 2. Although there are signs the economy is stagnating, inflation remains three times the BoE’s target of 2%. Money markets traders are betting the BoE is done raising rate increases, with rate cuts expected towards the end of 2024.

From a daily chart perspective, the uptrend remains intact despite dipping toward the 0.8700 figure. However, if EUR/GBP sellers drive prices below the 200-day moving average (DMA) at 0.8691, that could pave the way towards a more significant correction, with first support seen at the October 24 low of 0.8682, followed by the August 11 high of 0.8669. On the other hand, if the pair stays above 0.8700, a re-test of 0.8754 is on the cards, followed by the 0.88 handle. Up next would be the May 3 high at 0.8834.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8707 at the time of writing. Pair opened at 0.8723 and is trading with a change of -0.18 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 0.8677, 50 SMA 0.8634, 100 SMA @ 0.8609 and 200 SMA @ 0.8695.

The previous day high was 0.8741 while the previous day low was 0.8708. The daily 38.2% Fib levels comes at 0.8728, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.872, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8707, 0.8691, 0.8674
• Pivot resistance is noted at 0.874, 0.8757, 0.8773

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