The Euro is in a downtrend against the British Pound, and it looks like the EURGBP pair is currently attempting a recovery with a break above 0.8550.
EURGBP Price Weekly Analysis – Euro Eyeing Upside Vs Pound?
· The Euro declined below the 0.8500 level recently against the British Pound before starting a recovery.
· There is a crucial bearish trend line formed on the 4-hours chart of EURGBP, which may ignite a break above 0.8550.
· The Euro Zone M3 money supply released by the European Central Bank posted a rise of 4.4% in Oct 2016, less than the forecast of 5%.
EURGBP Technical Analysis
The Euro traded lower this past week and broke a couple of important support levels like 0.8600 and 0.8500. Later, the EURGBP pair started a recovery after trading as low as 0.8462. There is a descending channel pattern formed on the 4-hours chart of EURGBP, and the pair is currently attempting to clear the trend line at 0.8550.
The same area also represents the 23.6% Fib retracement level of the last decline from the 0.8824 high to 0.8462 low.
So, if the Euro buyers succeed in breaking the highlighted trend line resistance, it could open the doors for more gains in the short term. The highlighted major resistance at 0.8550 is critical and a clear break won’t be easy.
Trade Idea – If you are looking to enter a buy trade, then wait for a proper break and close above the 0.8550 in EURGBP.
This week in the Euro Zone, the M3, which is a measure of money supply was released by the European Central Bank. The market was expecting a rise of more than 5% in all currency in circulation, bank deposits, and repurchase agreements in Oct 2016, compared with Oct 2015.
However, the result was on the lower side, as there was an increase of 4.4% in Oct 2016. So, it boosted the US Dollar, and helped it in gaining traction. Moreover, the report added that the “annual growth rate of the narrower aggregate M1, which includes currency in circulation and overnight deposits, decreased to 7.9% in October, from 8.4% in September”.
Overall, it Euro may gain pace and break the 0.8550 resistance versus the British Pound to gain further.