EURGBP in Focus As ECB Forum on Central Banking Kicks Off
The EURGBP pair could be an interesting one to trade this Thursday when central bankers meet via satellite on the ECB Forum on Central Banking. This online event, which began today, will end tomorrow with comments from the heads of the ECB, BoE and Federal Reserve. The key event will be the policy panel sitting featuring Andrew Bailey (BoE Governor), Christing Lagarde (ECB Chair) and Jerome Powell (Fed Chair).
A lot of the discussion may centre on monetary policy in a post-coronavirus environment, as central banks scramble to restructure the global economic system that has been damaged by the coronavirus pandemic. The markets will be watching for comments that may hold clues as to the future of monetary policy direction for the three represented economies.
The EURGBP dropped to 6-month lows this week as shifting expectations for negative rates and Brexit strengthen the Pound over the Euro. What should traders watch for in possible trades during and after tomorrow’s event?
Technical Levels to Watch
Wednesday’s hammer candle that formed on the lower edge of the channel came off a bounce on the 0.88695 support line. Follow-through buying from sellers is required to open the door towards the 0.89488 resistance, with 0.90097 and 0.90651 lining up as potential upside targets.
On the other hand, further weakness on the pair has to break down the 0.88695 price level, which has served as the support for the pair since May 2020. If this happens, then a run towards 0.87873 will be on the cards for sellers. Additional targets to the south lie at 0.86811 (cluster of lows in April and May 2020) and 0.85952.