EURGBP rebounds from two-month lows as the pressure to euro ease today. Robust economic data from the UK economy helped the British pound the previous week. Boris Johnson told the cabinet that he still looking for 5% budget cuts, so it’s not clear whether there will be a net boost in the investment. Javid’s resignation as Chancellor last Thursday boosted hopes for a fiscal stimulus that send the EURGBP lower.
Eurozone economy was steady in the fourth quarter of 2019 amid weaker Germany economy. The European Monetary Union Gross Domestic Product last week reported at 0.1% in line with forecasts. The annualized Gross Domestic Product reading came in at 0.9% below the estimates of 1%. German GDP in the fourth quarter came in at 0.0% below the expectations of 0.1%. the resulting GDP for 2019 was 0.6% for the year.
I expect the volatility in EURGBP pair to continue as the Brexit negotiations progress and uncertainty will prevail. The optimism that boosted GBP after the December elections might be fade away as both parts take a hard stance ahead of the negotiations.
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EURGBP Technical Outlook
EURGBP is 0.40% higher at 0.8333 in an attempt to return inside the Bollinger Bands as the pair the last three trading sessions is hovering outside of the lower band. The pair snaps a five-day losing streak that drove the pair at two-month lows. The EURGBP technical analysis outlook is clearly bearish and lower levels might be on the cards.
On the upside, the immediate resistance will be met at 0.8335 the daily top. Next supply zone stands at 0.8401 the high from February 13th. The critical resistance point is at 0.8468 the 50-day moving average.
On the flip side, first support for the EURGBP stands at 0.8303 the daily low. A break below that support level would open the way for a move down to 0.8359 the low from December 17. Next support area to watch is the December 16th low at 0.8303.