The EUR to GBP exchange rate was little changed after the reports from Germany and the UK both disappointed market expectations. The currency pair is trading around its Asian session highs just above the 0.9600 handle following the release.
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According to the German GfK consumer climate report for March, consumers have grown deeply pessimistic of economic conditions in the country. It printed at 2.7 for the month and missed the forecast at 7.4. This also marks the lowest reading we have seen since May 2009. Meanwhile, consumer spending in the UK posted a 0.3% contraction in February. It was expected that retail sales would print a 0.2% uptick for the month.
These reports reflect the effect that the coronavirus pandemic has had on economies. As of this writing, both Germany and the UK have imposed lockdowns to curb the spread of the infection. Germany is fifth in the number of coronavirus cases at 37,323. Meanwhile, the UK is in ninth place with 9,640.
EUR to GBP Outlook
On the hourly time frame, it can be seen that the symmetrical triangle on the EUR to GBP exchange rate remains intact. This becomes apparent when you connect the lower highs and higher lows from March 19 to today. What does this mean?
In forex trading, symmetrical triangles are seen as an indicator of indecision by the market. A breakout is needed in order to get an idea where the currency pair headed. This means that a strong close above the triangle above yesterday’s high at 0.9274 could signal a potential rally to near-term resistance at 0.9368. On the other hand, a close below the bottom of the triangle at 0.9055 could indicate a fall to 0.8994.
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