#EURGBP @ 0.88045 gains strong positive traction and draws support from a combination of factors. (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 gains strong positive traction and draws support from a combination of factors.
• Easing fears of fresh turmoil in the European banking sector boosts the shared currency.
• The ECB-BoE policy divergence lends additional support ahead of the key ECB decision.

The pair currently trades last at 0.88045.

The previous day high was 0.8844 while the previous day low was 0.8718. The daily 38.2% Fib levels comes at 0.8766, expected to provide support. Similarly, the daily 61.8% fib level is at 0.8796, expected to provide support.

The EUR/GBP cross builds on the previous day’s late recovery move from the 0.8720 area, or a nearly two-month low and gains strong follow-through positive traction on Thursday. The momentum remains unabated through the mid-European session and pushes spot prices back above the 0.8800 round-figure mark in the last hour.

A positive development surrounding the Credit Suisse saga, along with the prospects for a jumbo rate hike by the European Central Bank (ECB), benefits the shared currency and acts as a tailwind for the EUR/GBP cross. In fact, the troubled Swiss bank announced that it will exercise an option to borrow up to $54 billion from the Swiss National Bank (SNB) to shore up the liquidity. This helps ease fears about fresh turmoil in the European banking sector. Adding to this, reports on Wednesday indicated that ECB policymakers are still leaning towards a 50 bps lift-off later today.

It is worth mentioning that investors had begun to doubt if the ECB will stick to its commitment for another big interest rate hike, especially after last week’s collapse of two mid-size US banks – Silicon Valley Bank and Signature Bank. However, a source close to the ECB’s rate-setting Governing Council said there was no fundamental change in the outlook, while the Eurozone economy is picking up strength and inflation is expected to remain high for years. In contrast, the markets are now pricing in a 50% chance that the Bank of England (BoE) will pause its rate-hiking cycle next week.

In fact, interest rate futures suggest a 50% chance that the BoE will leave rates unchanged and an equal possibility of a smaller 25 bps rate hike. This further contributes to the British Pound’s relative underperformance and provides an additional lift to the EUR/GBP cross. Thursday’s strong move up, meanwhile, follows the overnight failure to find bearish acceptance below the 100-day Simple Moving Average (SMA) and supports prospects for additional gains. Traders, however, might prefer to wait on the sidelines ahead of the key central bank event risk – the ECB policy decision.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8815 at the time of writing. Pair opened at 0.8774 and is trading with a change of 0.47 % .

The pair is trading below its 20 Daily moving average @ 0.8845, below its 50 Daily moving average @ 0.8839 , above its 100 Daily moving average @ 0.8769 and above its 200 Daily moving average @ 0.8682

The previous day high was 0.8844 while the previous day low was 0.8718. The daily 38.2% Fib levels comes at 0.8766, expected to provide support. Similarly, the daily 61.8% fib level is at 0.8796, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.8713, 0.8653, 0.8588
• Pivot resistance is noted at 0.8839, 0.8904, 0.8964

[/s2If]
Join Our Telegram Group