EUR/GBP - Inverted hammer, eyes EZ GDP & Brexit negotiations

Techs points to bearish exhaustion.
Confirmation of reversal awaited.
Focus on Eurozone GDP and Irish issue.

Omkar Godbole FXStreet Contributor

Having posted an inverted hammer on the daily chart yesterday, the EUR/GBP cross looks to gain altitude today.

As of writing, the pair is trading at 0.8820. The previous two daily candles - Doji and inverted hammer - indicates the sellers may have run out of steam around the 200-day MA. The moving average is stationed at 0.88 levels. However, only a positive close today would confirm a bullish reversal.

Eyes Eurozone GDP

The Eurozone GDP due at 10:00 GMT is expected to show the growth rate remained unchanged at 0.6% q/q and 2.5% y/y in Q3. A better-than-expected data could help EUR/GBP extend gains above the 50-day MA positioned at 0.8879.

Also, the UK PM May has only two days to save the Brexit deal or face further delays. Hence, the GBP is likely to stay on the back foot.

EUR/GBP Technical Levels

A close above 0.8879 (50-day MA) would confirm a bullish reversal and shall open up upside towards key resistance levels of 0.9014 (Nov. 15 high) and 0.9033 (Oct. 12 high). On the other hand, a breakdown of support at 0.88 (psychological support + 200-day MA) could yield a pullback to 0.8756 (Dec. 4 low) and 0.8733 (Nov. 1 low).

Author

Omkar Godbole

FXStreet Contributor

Omkar Godbole, editor and analyst, joined FXStreet after four years as a research analyst at several Indian brokerage companies.

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