• EUR/GBP regained some positive traction on Friday and recovered a part of the overnight losses.
  • Reduced BoE rate hike bets undermined the British pound and provided a modest lift to the cross.
  • A stronger USD weighed on the shared currency and held back bulls from placing aggressive bets.

The EUR/GBP cross traded with a mild positive bias through the first half of the European session, albeit seemed struggling to capitalize on the move beyond mid-0.8500s.

The cross attracted some buying on Friday and reversed a part of the previous day's sharp corrective slide from the vicinity of the 0.8600 mark, or over a two-month high. The British pound's relative underperformance comes amid diminishing odds for an imminent interest rate hike by the Bank of England (BoE).

Against the backdrop of persistent Brexit-related uncertainties, the imposition of fresh COVID-19 restrictions in the UK could force the BoE to delay its decision to hike interest rates. This, along with mostly disappointing UK macro releases undermined the sterling and provided a modest lift to the EUR/GBP cross.

The UK Office for National Statistics reported that the economic growth decelerated to 0.1% in October from a 0.6% rise reported in the previous month, missing expectations for a reading of 0.4%. Adding to this, the total industrial output dropped 0.6% in October as against a 0.1% increase anticipated and undermined the sterling.

Separately, the headline German CPI matched original estimates and fell 0.2% in November. The yearly rate stood at 5.2%, though did little to impress the euro bulls. The prevalent US dollar bullish sentiment exerted some pressure on the shared currency and kept a lid on any meaningful gains for the EUR/GBP cross.

This comes on the back of this week's rejection near a descending trend-line resistance extending from April swing high and warrants some caution for aggressive bullish traders. Hence, it will be prudent to wait for a strong follow-through buying before positioning for the resumption of a two-week-old upward trajectory.

Technical levels to watch

EUR/GBP

Overview
Today last price 0.8546
Today Daily Change 0.0003
Today Daily Change % 0.04
Today daily open 0.8543
 
Trends
Daily SMA20 0.8473
Daily SMA50 0.8484
Daily SMA100 0.8516
Daily SMA200 0.856
 
Levels
Previous Daily High 0.86
Previous Daily Low 0.854
Previous Weekly High 0.8551
Previous Weekly Low 0.8446
Previous Monthly High 0.8595
Previous Monthly Low 0.8381
Daily Fibonacci 38.2% 0.8563
Daily Fibonacci 61.8% 0.8577
Daily Pivot Point S1 0.8523
Daily Pivot Point S2 0.8502
Daily Pivot Point S3 0.8464
Daily Pivot Point R1 0.8582
Daily Pivot Point R2 0.862
Daily Pivot Point R3 0.8641

 

 

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