EURGBP Finds a Bullish Pattern Ahead of Lagarde, EU Summit
The EURGBP has rallied from recent lows as dismal U.K. employment outweighed Eurozone deflationary concerns. Today sees a speech from ECB President Christine Lagarde and also the bank’s Yves Mersch. Tomorrow brings the all-important EU summit, which was recently the target date for an agreement.
Alongside today’s speeches, there is the release of Eurozone industrial production. The number is expected to show a decline of -7.2% compared to last month’s -7.7%.
Yesterday saw German inflation figures come in as expected at -0.2%. This keeps a deflationary tone in the bloc and traders will look for clues from the ECB members about any changes in policy direction. The bank has recently criticized the stronger Euro and suggested intervention in the currency markets.
Tomorrow’s EU summit has a now-or-never tone with both sides still failing to agree on certain issues. U.K. Prime Minister Boris Johnson previously threatened to walk away from talks if a deal was not reached by Friday. Some U.K. media outlets are suggesting that a “deal in principle,” or “pathway to a deal” will be announced in order to extend negotiations and create a legal draft.
EURGBP Technical Outlook
EURGBP had closed below the 50-day moving average but a strong day yesterday has created a double bottom and a bullish reversal close above the moving average. The first target for bulls is the previous high at 0.9176 before the highs below 0.9300. Stop losses should be placed under the 0.9070 level. The Investing Cube team is currently available to assist all levels of traders with the Forex Trading Course or through one-to-one coaching.