EURGBP rallied on Friday to hold the recent lows and this sets the pair up for further potential gains on the week. Today sees the release of German IFO numbers, while the key event is Thursday’s policy meeting of the European Central Bank.
Today’s IFO Business Climate Index is a survey of 9,000 firms in manufacturing, the service sector, trade, and construction. The measure is watched by traders to get an idea of sentiment in business, however, the current climate maybe makes it less important to see a gloomy picture due to the effects of the virus. Today’s number is expected to show a reading of 93, which would be a slight decrease from 93.2 last month.
The key event this week for the euro will be Thursday’s ECB meeting where the bank will set out its latest policy measures. Markets don’t expect to see a move below the current interest rate of 0%, with the deposit rate at 0.5%. Traders expect the bank to hold steady and maybe make an adjustment to their bond-buying program in December, once the effects of the recent lockdowns are seen.
Spain announced a state of emergency on Sunday as the country seeks to deal with a second wave of the virus, while France set a new daily record of over 50,000 cases. The fear is that this will continue as the flu season worsens and could damage the fragile recovery in many European countries.
EURGBP Technical Outlook
The rally on Friday has seen the EURGBP hold the 0.9020 level and the pair now has resistance above into the recent 0.9175 high, which capped recent gains in September. This will be the key resistance to further gains, while a close near the 0.9020 mark again will likely continue the bear path. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
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EURGBP Daily Chart
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