#EURGBP @ 0.85872 has recovered from 0.8580 as ECB to remain hawkish despite deepening fears of recession. (Pivot Orderbook analysis)
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- EUR/GBP has recovered from 0.8580 as ECB to remain hawkish despite deepening fears of recession.
- Eurozone final Q1 GDP contracted by 0.1% while the street was anticipating a stagnant performance.
- Higher interest rates by the BoE are keeping pressure on the BoE.
The pair currently trades last at 0.85872.
The previous day high was 0.8614 while the previous day low was 0.8583. The daily 38.2% Fib levels comes at 0.8595, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8602, expected to provide resistance.
The EUR/GBP pair has shown a recovery move after finding buying interest near 0.8580 in the early European session. The cross has rebounded despite the Eurostat reported a contraction in final Q1 Gross Domestic Product (GDP) numbers.
On Thursday, the final Q1 GDP displayed a contraction by 0.1% while the street was expecting a stagnant performance from a downwardly revised figure of 0.1% expansion. Annual GDP expanded by 1.0% but at a slower pace than the prediction of 1.2% and the former release of 1.3%. The odds for Eurozone falling into a recession are extremely solid as the European Central Bank (ECB) is not going to pause its policy-tightening spell to tame sticky inflation.
Investors should note that the German economy has already reported a recession after registering a contraction in GDP figures consecutively for two quarters.
According to a clear majority of economists polled by Reuters, ECB President Christine Lagarde will hike its key interest rates by 25 basis points (bps) on June 15 and again in July before pausing for the rest of the year. The move of hiking rates further by a total of 50 bps would push key rates to 4.25%.
On the Pound Sterling front, investors are shifting their focus toward the United Kingdom Employment data, which will release next week. Higher interest rates by the Bank of England (BoE) and expectations of more rate hike announcements by BoE Governor Andrew Bailey would keep pressure on the overall hiring process.
Economists at ING said second or third-tier United Kingdom data has been quite mixed recently, but the main event on the data front will be next Tuesday’s release of jobs and wages data. We see that as a negative event risk for the Sterling, where wage growth could continue to slow and take some of the steam out of the 100 bps+ Bank of England tightening expectations still priced in by money markets.
Technical Levels: Supports and Resistances
EURGBP currently trading at 0.8589 at the time of writing. Pair opened at 0.8584 and is trading with a change of 0.06 % .
| Overview | Overview.1 | |
|---|---|---|
| 0 | Today last price | 0.8589 |
| 1 | Today Daily Change | 0.0005 |
| 2 | Today Daily Change % | 0.0600 |
| 3 | Today daily open | 0.8584 |
The pair remains strongly bearish on the daily time frame. It trades below the 20 SMA @ 0.8655, 50 SMA 0.8735, 100 SMA @ 0.8784 and 200 SMA @ 0.8755.
| Trends | Trends.1 | |
|---|---|---|
| 0 | Daily SMA20 | 0.8655 |
| 1 | Daily SMA50 | 0.8735 |
| 2 | Daily SMA100 | 0.8784 |
| 3 | Daily SMA200 | 0.8755 |
The previous day high was 0.8614 while the previous day low was 0.8583. The daily 38.2% Fib levels comes at 0.8595, expected to provide resistance. Similarly, the daily 61.8% fib level is at 0.8602, expected to provide resistance.
Note the levels of interest below:
- Pivot support is noted at 0.8574, 0.8563, 0.8543
- Pivot resistance is noted at 0.8604, 0.8625, 0.8635
| Levels | Levels.1 |
|---|---|
| Previous Daily High | 0.8614 |
| Previous Daily Low | 0.8583 |
| Previous Weekly High | 0.8695 |
| Previous Weekly Low | 0.8568 |
| Previous Monthly High | 0.8835 |
| Previous Monthly Low | 0.8583 |
| Daily Fibonacci 38.2% | 0.8595 |
| Daily Fibonacci 61.8% | 0.8602 |
| Daily Pivot Point S1 | 0.8574 |
| Daily Pivot Point S2 | 0.8563 |
| Daily Pivot Point S3 | 0.8543 |
| Daily Pivot Point R1 | 0.8604 |
| Daily Pivot Point R2 | 0.8625 |
| Daily Pivot Point R3 | 0.8635 |
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