#EURGBP @ 086156 is auctioning in a minute range as ECB policy hogs the limelight, Pivot Orderbook analysis

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• EUR/GBP is auctioning in a minute range as ECB policy hogs the limelight.
• ECB’s Nagel has advocated for a strong rate hike announcement in September.
• UK’s long-term inflation expectations are seen at 4.8% vs. BOE’s target of 2%.

The pair currently trades last at 0.86156.

The previous day high was 0.8653 while the previous day low was 0.8572. The daily 38.2% Fib levels comes at 0.8622, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8603, expected to provide support.

The EUR/GBP pair is displaying a balanced market profile after delivering a corrective move from Thursday’s high at 0.8670. The asset is oscillating in a narrow range of 0.8608-0.8618 and a make-or-break move is expected ahead as investors are shifting their focus towards the interest rate decision by the European Central Bank (ECB) next week.

As price pressures have skyrocketed in the Eurozone region amid soaring energy bills after supply cuts by Russia, the ECB is bound to discuss a jumbo rate hike to cool down the red-hot inflation. ECB’s Governing Council member and German central bank head Joachim Nagel on Wednesday cited that the ECB “urgently needs to act decisively next week,” He further added that “We need a strong rate hike in September,”

Investors should be aware of the fact that Eurozone inflation has crossed the whooping figure of 9% comfortably and is expected to remain on the elevated side as the energy crisis is expected to dampen further. As the winter season is standing at doors and leads to more energy consumption, energy prices will scale much higher. Hopefully, September 2 remains the last day of energy supply cuts to Germany as Nord Stream 1 went under unscheduled maintenance for three days.

On the UK front, soaring price pressures are haunting the pound bulls. The bank of England (BOE) is continuously hiking interest rates to fix the inflation chaos, however, the inflation rate is not responding at all to the restrictive monetary policies. As per a Citi survey, long-term inflation expectations are seen at 4.8%, which is extremely higher than the desired rate of 2%.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8617 at the time of writing. Pair opened at 0.8653 and is trading with a change of -0.42 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 0.8467, 50 SMA 0.8486, 100 SMA @ 0.8486 and 200 SMA @ 0.8441.

The previous day high was 0.8653 while the previous day low was 0.8572. The daily 38.2% Fib levels comes at 0.8622, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8603, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.8598, 0.8544, 0.8517
• Pivot resistance is noted at 0.868, 0.8708, 0.8762

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