EURGBP sticks to modest gains above mid-0.8700s, lacks bullish conviction


  • EURGBP gains some positive traction for the second straight day, though lacks any follow-through.
  • A modest USD rebound is weighing on the common currency and acting as a headwind for the cross.
  • Traders also seem reluctant ahead of this week’s UK macro data and Chancellor Hunt’s statement.

The EURGBP cross edges higher for the second successive day on Monday and sticks to its modest intraday gains through the early European session. The cross is currently placed above the mid-0.8700s, though lacks any follow-through buying or bullish conviction.

The shared currency continues to draw some support from bets for a more aggressive policy tightening by the European Central Bank (ECB). The British Pound, on the other hand, is undermined by the gloomy outlook for the UK economy. In fact, the National Institute of Economic and Social Research (NIESR) expects the UK GDP growth to be flat in Q4 and noted that the risk of a contraction remains elevated. This, in turn, is seen lending some support to the EURGBP cross.

That said, the prospects for further interest rate hikes by the Bank of England act as a tailwind for the Sterling. Apart from this, a modest US Dollar recovery from a nearly three-month low exerts some pressure on the Euro and keeps a lid on any meaningful upside for the EURGBP cross, at least for now. Traders also seem reluctant to place aggressive bets ahead of this week's important UK macro data - the monthly jobs report on Tuesday and the CPI report on Wednesday.

Investors will further take cues from the BoE's Monetary Policy Report Hearings on Wednesday and Chancellor Jeremy Hunt’s Autumn Statement on Thursday. This will play a key role in influencing the near-term sentiment surrounding the GBP and determine the next leg of a directional move for the EURGBP cross. In the meantime, spot prices seem more likely to consolidate in a range amid absent relevant market-moving economic releases, either from the Eurozone or the UK.

Technical levels to watch

EUR/GBP

Overview
Today last price 0.876
Today Daily Change 0.0015
Today Daily Change % 0.17
Today daily open 0.8745
 
Trends
Daily SMA20 0.8693
Daily SMA50 0.8727
Daily SMA100 0.8607
Daily SMA200 0.8519
 
Levels
Previous Daily High 0.8779
Previous Daily Low 0.8704
Previous Weekly High 0.8828
Previous Weekly Low 0.869
Previous Monthly High 0.8867
Previous Monthly Low 0.8572
Daily Fibonacci 38.2% 0.875
Daily Fibonacci 61.8% 0.8733
Daily Pivot Point S1 0.8706
Daily Pivot Point S2 0.8668
Daily Pivot Point S3 0.8632
Daily Pivot Point R1 0.8781
Daily Pivot Point R2 0.8817
Daily Pivot Point R3 0.8855

 

 

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