#EURGBP @ 0.88654 remains depressed for the fourth straight day and drops to over a one-week low. (Pivot Orderbook analysis)

…
This is a premium post.
[s2If !current_user_can(access_s2member_level4)]Please register for PREMIUM VERSION HERE to read full post below containing analysis. In case of any error or you think you are not able to read the full post below, please email us at support#nehcap.com [lwa][/s2If] [s2If current_user_can(access_s2member_level4)]

• EUR/GBP remains depressed for the fourth straight day and drops to over a one-week low.
• Softer-than-expected German inflation figures undermine the Euro and exert some pressure.
• Expectations the BoE is nearing the end of its rate-hiking cycle should help limit the downside.

The pair currently trades last at 0.88654.

The previous day high was 0.8911 while the previous day low was 0.8875. The daily 38.2% Fib levels comes at 0.8889, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8897, expected to provide resistance.

The EUR/GBP cross turns lower for the fourth successive day on Thursday and drops to over a one-week low, around the 0.8860 region during the early part of the European session.

The shared currency’s relative underperformance against its British counterpart could be attributed to the softer German consumer inflation figures. In fact, the German statistical office, Destatis reported that the Harmonised Index of Consumer Prices (HICP) dropped to 9.2% on a yearly basis in January from 9.6% in December. On a monthly basis, the HICP rose 0.5% in the first month of the year against the 1.4% expected and -1.2% prior. This, in turn, is seen as a key factor exerting some downward pressure on the EUR/GBP cross.

That said, the prospects for additional jumbo rate hikes from the European Central Bank (ECB), along with the emergence of fresh US Dollar selling, should limit losses for the Euro. In fact, the ECB policymaker Klaas Knot said on Wednesday that the central bank may extend its streak of large interest hikes into May if core inflation doesn’t ease by then. Apart from this, expectations that the Bank of England rate-hiking cycle is nearing the end should lend some support to the EUR/GBP cross, warranting some caution for bearish traders.

It is worth recalling that the UK central bank removed the phrase that they would “respond forcefully, as necessary”. Furthermore, BoE Governor Andrew Bailey said that inflation will fall more rapidly during the second half of 2023. This suggested that the BoE was becoming increasingly unsure as to whether further policy tightening is warranted. Hence, investors now look to the BoE’s monetary policy report hearing for clues about future rate hikes, which will influence the Sterling Pound and provide a fresh impetus to the EUR/GBP cross.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8869 at the time of writing. Pair opened at 0.8878 and is trading with a change of -0.1 % .

The pair remains strongly bullish on the daily timeframe. It trades above its 20 SMA @ 0.8833, 50 SMA 0.8775, 100 SMA @ 0.8748 and 200 SMA @ 0.8641.

The previous day high was 0.8911 while the previous day low was 0.8875. The daily 38.2% Fib levels comes at 0.8889, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8897, expected to provide resistance.

Note the levels of interest below:

• Pivot support is noted at 0.8865, 0.8852, 0.8828
• Pivot resistance is noted at 0.8901, 0.8924, 0.8937

[/s2If]
Join Our Telegram Group