EURGBP – 0.7940 To Keep Sellers Interested
Technical Bias: Bearish
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- Euro climbed yesterday against the British pound after the UK retail sales figure came as a disappointment.
- EURGBP jumped above the 0.7910 level to trade as high as 0.7935.
- EURGBP support seen at 0.7908 and resistance ahead at 0.7940.
The Euro is facing a stiff resistance around the 0.7930-40 area against the British pound, and if the EURGBP pair fails to break it, then it is possible that the pair might move lower again.
There is a monster bearish trend line forming on the 4 hour chart for the EURGBP pair, which might act a barrier for the Euro buyers in the short term. The recent run towards the upside stalled right around the 61.8% Fibonacci retracement level of the last drop from the 0.7977 high to 0.7870 low. Currently, the pair is trading around the 100 simple moving average (SMA) – 4H. However, it has managed to close above the 50 SMA (4H). If the pair manages to climb higher again, then the highlighted trend line might act as a hurdle. It would be tough for the Euro buyers to break the 0.8940 level, but if they manage to do so, then it could open the doors for further upside acceleration towards the 200 SMA (4H).
On the other hand, if the EURGBP pair fails to break higher, then it could move back lower towards the 0.8900 support area. A push below the mentioned support level might take the pair towards the last low of 0.7970.
UK GDP And German IFO Business Climate Index
There are few important risk events lined up later during the London session, including the UK GDP and German IFO Business Climate Index. Both these events have the potential of causing swing moves in the EURGBP pair. So, keep an eye on these events and watch out for a break higher or a move lower.