#EURGBP @ 0.87208 EURGBP is expected to test the 0.8700 cushion amid escalating Russia-Poland tensions. (Pivot Orderbook analysis)

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• EURGBP is expected to test the 0.8700 cushion amid escalating Russia-Poland tensions.
• The speech from ECB Lagarde will dictate the likely monetary policy action ahead.
• Bifurcation of tax hikes and spending cuts to cover a debt of GBP 60bln in the Autumn Statement will be keenly watched.

The pair currently trades last at 0.87208.

The previous day high was 0.8806 while the previous day low was 0.8708. The daily 38.2% Fib levels comes at 0.8746, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8768, expected to provide resistance.

The EURGBP pair has turned back-and-forth in a 0.8720-0.8740 range in early Tokyo after a perpendicular decline from the round-level resistance of 0.8800. The cross is expected to resume its downside journey and may find an intermediate cushion around 0.8700 amid escalating geopolitical tensions.

The sentiment of Eurozone investors has been dented as Russia expanded its military activity to NATO-member Poland after crippling Ukraine. Investors need fresh impetus for further action and the outcome of the NATO ambassadors meeting called by Poland will provide the same. Further escalation in geopolitical tensions may accelerate supply chain disruptions in the trading bloc.

Apart from that, the speech from European Central Bank (ECB) President Christine Lagarde will remain in focus. ECB President is expected to provide cues about the likely monetary policy action ahead. Also, guidance on inflationary pressures will be of utmost importance.

On the UK front, the release of the inflation data and dictation of the first Autumn Statement under the leadership of Prime Minister Rishi Sunak and Chancellor Jeremy Hunt will be of utmost importance.

The headline Consumer Price Index (CPI) is seen extremely higher at 10.7% vs. the prior release of 10.1%. While the core CPI that excludes oil and food prices may decline marginally to 6.4% against the former release of 6.5%.

For Autumn Budget, investors will focus on the bifurcation of tax hikes and spending cuts to meet the GBP 60bln fiscal hole. Treasury sources told Sky News the financial “black hole” could be as large as £60bn – which may require up to £35bn of spending cuts and an extra £25bn raised through taxation. Also, cap figure for energy bills will be of significant importance.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8719 at the time of writing. Pair opened at 0.8728 and is trading with a change of -0.1 % .

The pair is trading above its 20 Daily moving average @ 0.8701, below its 50 Daily moving average @ 0.8733 , above its 100 Daily moving average @ 0.861 and above its 200 Daily moving average @ 0.8522

The previous day high was 0.8806 while the previous day low was 0.8708. The daily 38.2% Fib levels comes at 0.8746, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8768, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8689, 0.865, 0.8592
• Pivot resistance is noted at 0.8786, 0.8845, 0.8884

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