The euro fails to break resistance at 0.8785 and retreats to 0.8700. (Pivot Orderbook analysis)

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• The euro fails to break resistance at 0.8785 and retreats to 0.8700.
• The pound remains bid with the US dollar losing ground.
• EURGBP is expected to depreciate in the longer-term – Danske Bank.

The pair currently trades last at 0.8696.

The previous day high was 0.8785 while the previous day low was 0.87. The daily 38.2% Fib levels comes at 0.8753, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8732, expected to provide resistance.

The euro is pulling back on Monday, giving away gains after a three-day rally last week. The pair was rejected at the 0.8785 resistance area during the early European session before pulling back to the 0.8700 area, against a stronger British pound.

The favorable market mood witnessed on Monday, which is weighing further on the safe-haven US dollar, has increased support for the GBP, with investors focusing on the British Government’s plans to tackle UK’s debt crisis.

Finance minister Jeremy Hunt is working on a plan to fill a 50 billion pound deficit in the country’s finances, which contemplates spending cuts between 30 and 35 billion and tax increases of between 20 and 25 billion, according to market sources.

The project will be presented on November 17 with the intention to restore investors’ confidence after the market turmoil triggered by Liz Truss’ tax-cutting program presented in late September.

Currency analysts at Danske Bank expect the pair to appreciate in the short term and lose ground in the longer term: “We see a case for EURGBP to remain elevated in the near-term, but in the longer-term expect the cross to move lower as a global growth slowdown and the relative appeal of UK assets to investors are positive for GBP relative to EUR.”

Technical Levels: Supports and Resistances

EURUSD currently trading at 0.8696 at the time of writing. Pair opened at 0.876 and is trading with a change of -0.73 % .

The pair is trading above its 20 Daily moving average @ 0.8693, below its 50 Daily moving average @ 0.8714 , above its 100 Daily moving average @ 0.86 and above its 200 Daily moving average @ 0.851

The previous day high was 0.8785 while the previous day low was 0.87. The daily 38.2% Fib levels comes at 0.8753, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8732, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8712, 0.8663, 0.8626
• Pivot resistance is noted at 0.8797, 0.8834, 0.8883

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