EURGBP has created a strong base around mid 0.87 after the recent correction from multi-year highs. The consolidation phase is intact, and traders are looking for fresh catalysts for the next trend. On the data front, the unemployment rate rose to 4% from 3.9% which is the highest reading in months, with many analysts now forecasting a jump to over 10% in unemployment rates in the upcoming months. Now 76.6% of people aged 16 to 64 were in paid work, slightly higher from 76.4% in the previous quarter. There are 33.07 million people in employment, that is 352k more than a year earlier.
Investors await the 27 EU leaders meeting on Thursday on the coronavirus bond and other measures in the fight against the pandemic crisis. The size of the new bond is unknown, but Spain is asking for 1.5 trillion funds while the countries in the North are proposing a fund of around 0.7 – 1.0 trillion euros. The 27 finance ministers failed to reach an agreement the previous week on a joint rescue plan to support the coronavirus hit economies.
EURGBP is 0.52% higher at 0.8775, breaking above the 50 and 200 day moving averages. A credible settlement today above the 200-day moving average would open the way for another leg higher targeting 0.89.
On the upside, the first resistance stands at 0.8779 the daily top. A break above might challenge the next resistance at 0.8834 the high from April 8. If EURGBP break above 0.8834 then might test the next supply zone at 0.8910 the high from April 1.
On the other hand, the first support for the pair stands at 0.8725 the session low. A move below 0.8725 might test the next support zone at 0.8688 the low from yesterday’s trading session. More bids for the pair might emerge at 0.8615 the 100-day moving average.