EURGBP seesaws today after yesterday’s sharp gains that drove the price close to 0.90 mark. Positive sentiment around the euro comes from the EU Commission proposal on the recovery fund. The proposal includes 250 billion in loans and 500 billion, which would be handed out as grants to the worst affected European countries by the coronavirus crisis. The proposal offered a strong signal for the unity of the EU and boosted the common currency.
However, some analysts believe that the EU recovery fund and the purchase of risky assets by ECB will contain sovereign risk for the eurozone. Also, the bureaucracy in Brussels might cancel the recovery efforts as the delays might not support the fast recovery of the EU economy.
On the economic data, the European Monetary Union Consumer Confidence came in at -18.8 in line with the forecasts for May. The EMU Economic Sentiment Indicator dropped to 67.5 in May below the expectations of 70.3. The Industrial Confidence came in at -27.5, below the forecasts of -25.7. The EMU Services Sentiment came in at -3.6 below the expectations of -28.6 in May, while the Business Climate dropped to -2.43 in May from -1.81 in April.
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EURGBP Price Analysis
EURGBP is 0.01% higher at 0.8973, making fresh weekly highs as the positive momentum for the euro is intact above the 50-day moving average. The technical picture for EURGBP pair remains bullish, and only a move below the 50-day moving average at 0.8845 might cancel the positive trend.
On the upside, initial resistance for EURGBP stands at 0.8989 the daily high. A break above 0.8989 might challenge the next resistance at 0.9008 the high from May 21. If the pair breaks above then might test the next supply zone at 0.9094 the high from March 27.
On the flip side, the first support for EURGBP stands at 0.8963 the daily low. A close below 0.8963 might test the next support zone at 0.8866 the low from May 20. More support for the EURGBP pair might emerge at 0.8845 the 50-day moving average.