#EURGBP @ 0.87824 Euro gains momentum following Spain’s inflation data, ahead of ECB. (Pivot Orderbook analysis)

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• Euro gains momentum following Spain’s inflation data, ahead of ECB.
• EZ bond yields rise, German 10-year climbs to 2.32%, the highest since January 6.
• EUR/GBP challenges 0.8800 after finding support at 0.8755.

The pair currently trades last at 0.87824.

The previous day high was 0.8805 while the previous day low was 0.8765. The daily 38.2% Fib levels comes at 0.878, expected to provide support. Similarly, the daily 61.8% fib level is at 0.879, expected to provide resistance.

The EUR/GBP is rising on Monday after falling for three consecutive days. The euro is rebounding from weekly lows near 0.8755 and is testing the 0.8800 area, supported by the latest round of Eurozone economic data and ahead of monetary policy decisions.

Data released on Monday showed Inflation in Spain surprised to the upside. The Harmonised Consumer Price Index in Spain rose to 5.8% in January from 5.5% in December and above the market consensus of 4.8%. It was the first acceleration since July supporting expectations of a hawkish European Central Bank (ECB). More Euro Zone inflation data is due on Tuesday.

In Germany, the economy contracted 0.4% during the fourth quarter, against expectations of a flat reading, according to preliminary data. On the positive side, Consumer Confidence in the Eurozone improved to -20.9 in January, while the Economic Sentiment also ticked higher to 99.9.

After the numbers, Eurozone government bond yields rose, supporting the Euro across the board. The German 10-year yield rose to 2.32%, the highest since January 6.

On Thursday, the ECB will have its monetary policy meeting. A 50 basis points rate hike is priced in. The statement and clues about the future path will be the critical factors of the meeting.

In the UK, UK Prime minister Rishi Sunak said he will not raise taxes in order to fund pay raises for Health Service workers. During the weekend, Sunak fired Conservative Party chairman Nadhim Zahawi over a tax row.

The Bank of England is expected to raise its key interest rate by 50 basis points on Thursday, although many analysts expected a smaller increase. There is a division at the Monetary Policy Committee that will likely continue this week.

The EUR/GBP cross will likely have a volatile week, particularly on Thursday, the central bank’s day. Ahead of those critical events, the cross is moving sideways, testing the 20-day Simple Moving Average and the 0.8800 area. On the upside, the immediate strong resistance is seen around 0.8860. On the flip side, a close below 0.8730 should open the doors to more losses.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8798 at the time of writing. Pair opened at 0.8769 and is trading with a change of 0.33 % .

The pair is trading below its 20 Daily moving average @ 0.881, above its 50 Daily moving average @ 0.8735 , above its 100 Daily moving average @ 0.8735 and above its 200 Daily moving average @ 0.8622

The previous day high was 0.8805 while the previous day low was 0.8765. The daily 38.2% Fib levels comes at 0.878, expected to provide support. Similarly, the daily 61.8% fib level is at 0.879, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8754, 0.874, 0.8715
• Pivot resistance is noted at 0.8794, 0.8819, 0.8834

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