- EUR/GBP is seeing some selling on Friday and has now erased the previous day’s gains after the ECB.
- The risk of a sovereign debt crisis and fears of a recession put pressure on the common currency.
- Expectations for a BoE rate hike of 50 basis points in August benefit the British pound and add to the selling bias in the pair.
The crossing EUR/GBP it extends the previous day’s pullback from the post-ECB high in the 0.8585 region, or the highest level since July 6, and sees some continuation selling on Friday. Pullback extends into European session, though finds some support just below the psychological level of 0.8500.
The common currency’s relative underperformance comes amid a lack of specific details, conditionality and what would justify the activation of the ECB’s anti-fragmentation tool. In addition, the recent widening of the Italian and German government bond yield spread the risk of a sovereign debt crisis has increased. This, coupled with growing fears of a recession, are overshadowing the ECB’s big 50 basis point rate hike on Thursday and putting downward pressure on the EUR/GBP cross.
Intraday sales picked up after the release of disappointing Eurozone PMI data. The preliminary report on manufacturing activity from S&P Global/BME research showed that recession in German manufacturing and services sectors accelerated in July. Indeed, the Eurozone economic powerhouse’s manufacturing PMI slumped to a 25-month low and the services PMI fell to the lowest level in seven months. Furthermore, the eurozone manufacturing PMI also unexpectedly contracted in July.
Secondly, sterling was supported by better-than-expected preliminary UK PMI data for July. In addition, the possibility that the Bank of England will raise interest rates by 50 basis points in August is another factor that has helped support the pound sterling. This, in turn, supports the prospects for a further short-term bearish move.
EUR/GBP technical levels
EUR/GBP
Overview | |
---|---|
last price today | 0.8512 |
daily change today | -0.0029 |
Today’s daily variation in % | -0.34 |
Daily opening today | 0.8541 |
Trends | |
---|---|
daily SMA20 | 0.8536 |
daily SMA50 | 0.8536 |
daily SMA100 | 0.8462 |
daily SMA200 | 0.8444 |
levels | |
---|---|
Previous daily high | 0.8586 |
Previous Daily Low | 0.8493 |
Previous Weekly High | 0.8514 |
Previous Weekly Low | 0.8404 |
Previous Monthly High | 0.8721 |
Previous Monthly Low | 0.8486 |
Daily Fibonacci of 38.2% | 0.8551 |
Daily Fibonacci of 61.8% | 0.8529 |
Daily Pivot Point S1 | 0.8494 |
Daily Pivot Point S2 | 0.8447 |
Daily Pivot Point S3 | 0.8401 |
Daily Pivot Point R1 | 0.8587 |
Daily Pivot Point R2 | 0.8633 |
Daily Pivot Point R3 | 0.8679 |
Source: Fx Street
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