EUR to GBP Steady Ahead of Germany’s Final GDP and CBI Realized Sales
Thanks to the better-than-expected German IFO Business Climate Report, the euro was able to extend its gains against the pound to a fourth consecutive day yesterday. The EUR to GBP exchange rate closed higher at 0.8388 yesterday from opening at 0.8341.
Data for February showed that businesses felt more confident about economic conditions. The survey printed higher at 96.1 than the 96.0 reading for January and the 95.0 forecast. Consequently, this helped alleviate concerns about growth in Germany which is the euro zone’s largest economy.
Today, a couple of reports are due which could spark volatility on the EUR to GBP exchange rate if they deviate from the consensus. At 7:00 am GMT, the final reading of Germany’s GDP report is expected to print at 0.0%. Then at 11:00 am GMT, the CBI Realized Sales from the UK is anticipated at 4.
On the 4-hour time frame, the EUR to GBP time frame can be seen testing resistance at the 100 SMA. This price, around 0.8390, also coincides with the 50% Fib level (when you draw the Fibonacci retracement tool from the high of February 10 to February 18). A close above today’s Asian session highs at 0.8406 could mean that there may be enough buyers in the market to push the currency pair higher. Near-term resistance is at 0.8445 where the 200 SMA and falling trend line (from connecting the highs of January 14, February 4, and February 10) coincide. If the euro is able to sustain its gains, we could even see a break of the falling trend line which may trigger a rally. Near-term resistance is at its February’s highs at 0.8493. This could be sparked by positive euro zone data or a disappointing UK figure.
On the other hand, a drop below yesterday’s low at 0.8341 could mean that the EUR to GBP exchange rate may soon revisit its recent lows at 0.8281.