EURGBP consolidates around the 0.8800 level, just below the one-month high marked on Wednesday

  • EURGBP lacks firm intraday direction and is range bound on Thursday.
  • However, a combination of factors continues to act as a tailwind for the crossing.
  • Talk of aggressive ECB tightening underpins the Euro and offers support to the pair.
  • The BoE’s not very optimistic outlook on the UK economy supports the prospects for further gains in the pair.

The crossing EURGBP oscillates in a range around the level of 0.8800during the first part of the European session on Thursday and consolidates the strong gains of the previous day to reach an almost one-month high.

The Bank of England’s gloomy outlook for the UK economy turns out to be a key factor behind the relatively poor performance of the pound sterling and act as a tailwind for the EURGBP cross. In fact, the UK central bank expects the recession to last through 2023 and the first half of 2024. In addition, the BoE indicated last week a terminal rate lower than what was quoted in the markets.

On the other hand, the common currency continues to receive some support from expectations for a more aggressive tightening of monetary policy by the European Central Bank (ECB). Several ECB policymakers, including its President Christine Lagarde, have indicated that the central bank will continue to hike rates aggressively to tackle consumer inflation, which accelerated to a record 10.7% in October.

This, in turn, pushed German short-term yields to new multi-year highs earlier this week and reinforces the short-term positive bias for the EURGBP cross. Even from a technical perspective, previous day’s sustained move and acceptance above the 0.8775-0.8780 zone support prospects for an extension of an uptrend almost three weeks.

No major economic data will be released on Thursday, neither from the Eurozone nor from the UK. Therefore, the focus is on the preliminary UK GDP data for the third quarter, due to be released on Friday. Investors will also be keeping an eye out for UK Finance Minister Jeremy Hunt’s tax return on November 17th. However, the fundamental background seems to be leaning in favor of the bulls.

EURGBP technical levels

EUR/GBP

Overview
last price today 0.8798
daily change today -0.0023
Today’s daily variation in % -0.26
Daily opening today 0.8821
Trends
daily SMA20 0.8687
daily SMA50 0.8723
daily SMA100 0.8605
daily SMA200 0.8516
levels
Previous daily high 0.8828
Previous Daily Low 0.8716
Previous Weekly High 0.8785
Previous Weekly Low 0.8572
Previous Monthly High 0.8867
Previous Monthly Low 0.8572
Daily Fibonacci of 38.2% 0.8785
Daily Fibonacci of 61.8% 0.8759
Daily Pivot Point S1 0.8748
Daily Pivot Point S2 0.8675
Daily Pivot Point S3 0.8635
Daily Pivot Point R1 0.8861
Daily Pivot Point R2 0.8901
Daily Pivot Point R3 0.8974

Source: Fx Street

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