#EURGBP @ 0.84377 -imp levels: attracts fresh selling on Thursday and retreats from the vicinity of the weekly high.

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• EUR/GBP attracts fresh selling on Thursday and retreats from the vicinity of the weekly high.
• Europe’s energy supply concerns, a downward revision of the monthly HICP weighs on the euro.
• Expectations for a gradual BoE rate hike, recession fears could cap sterling and limit the downside.

The pair currently trades last at 0.84377.

The previous day high was 0.845 while the previous day low was 0.8388. The daily 38.2% Fib levels comes at 0.8427, expected to provide support. Similarly, the daily 61.8% fib level is at 0.8412, expected to provide support.

The EUR/GBP cross meets with a fresh supply on Thursday and retreats over 40 pips from the vicinity of the weekly high. The cross drops to a fresh daily low, around the 0.8425 region in the last hour, and reverses a part of the previous day’s strong bounce from a nearly two-week low.

The shared currency continues to be undermined by mounting energy supply concerns, which could drag the Eurozone economy faster and deeper into recession. This turns out to be a key factor acting as a headwind for the EUR/GBP cross and attracting fresh sellers at higher levels. Meanwhile, the latest leg down follows a sharp downward revision of the Eurozone Harmonised Index of Consumer Prices (HICP) for July to 0.1% MoM from the 0.8% reported previously.

The British pound, on the other hand, draws some support from a modest US dollar pullback from the monthly high set earlier this Thursday. This was seen as another factor exerting additional downward pressure on the EUR/GBP cross. That said, speculations that an economic downturn might force the UK central bank to adopt a gradual approach to raising interest rates could cap any meaningful gains for sterling and lend some support to the EUR/GBP cross.

The mixed fundamental backdrop could hold back traders from placing aggressive bets and contribute to limiting the downside for the EUR/GBP cross, at least for the time being. Even from a technical perspective, the recent price action within a broader trading range witnessed over the past two weeks or so points to indecision among traders. This further makes it prudent to wait for some follow-through selling before positioning for further intraday losses.

Technical Levels: Supports and Resistances

EURGBP currently trading at 0.8431 at the time of writing. Pair opened at 0.8448 and is trading with a change of -0.2 % .

The pair is trading above its 20 Daily moving average @ 0.8429, below its 50 Daily moving average @ 0.8502 , below its 100 Daily moving average @ 0.8471 and below its 200 Daily moving average @ 0.8438

The previous day high was 0.845 while the previous day low was 0.8388. The daily 38.2% Fib levels comes at 0.8427, expected to provide support. Similarly, the daily 61.8% fib level is at 0.8412, expected to provide support.

Note the levels of interest below:

• Pivot support is noted at 0.8407, 0.8367, 0.8345
• Pivot resistance is noted at 0.847, 0.8491, 0.8532

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