Forex: EUR/GBP edges up to test 0.8400

on Sep 17, 2013
Listen September Tuesday 17th_: Yesterday from the opening of the Asian session to the end of American trading the EUR/GBP gained 0.12 percent, closing at 0.8386. The pair’s movement was contained between the 0.8391 high and the 0.8369 low. The price action formed an indecision candle on the daily chart and also formed a convergence on the daily MACD (9,12,1) oscillator, which is a bullish sign.

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Today the upwards movement expanded with the EUR/GBP reaching an intraday high at 0.8409, where the price encountered resistance and the pair is currently trading at 0.8391. The 0.8400 level, which had been acting as a very strong support from February to early September, is currently acting as a resistance and may not let the price climb without putting up a fight.

The standard RSI and Williams’ percent range oscillators came out of the oversold zone and combined with the MACD convergence may push the price upwards, away from the lower line of the descending channel, within which the pair has been moving since the 1 August high of 0.8768.
The difference in value between imported and exported goods, services, income flows, and unilateral transfers (Current Account) in the Eurozone for July is €16.9 billion, which disappointed the expectations for a €18.3 billion surplus. The prior number was revised upwards from a €16.9 billion surplus to €19.8 billion.

German ZEW Economic Sentiment rose to 49.6 points in September from 42.0 in August and bettered forecasts for an increase to 45.3 points. The Eurozone’s ZEW Economic Sentiment for September also pleased euro bulls with a significant jump to 58.6 points from the prior 44.0 points. Expectations had been for a rise to 47.2 points.
The annual rate of inflation in the UK fell in August, while the housing price index logged a new record in its annual increase. According to official figures, the CPI slowed to 2.7 percent in August from 2.8 percent in July. The slowdown in inflation brings it closer to the 2 percent target set by the central bank in order to maintain price stability. The HPI y/y rose by 3.3 percent in July.

The UK data, which came out before the Eurozone’s figures, pushed the EUR/GBP from 0.8381 to 0.8409. The ZEW Economic Sentiment didn’t have an immediate effect and even after one hour the price fell below the 0.8400 mark.
Resistance levels significant today: 0.8400/10, 0.8425 and 0.8450.
Support levels important today: 0.8380, 0.8360 and 0.8350.


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