EURGBP

EURGBP: EUR to GBP clinches new high as EU financing deal reached

Gold prices are diving as the US trading session gets underway. The move lower in gold prices is fueled by a stronger US Dollar and US stock markets being near their all-time highs, lowering the demand for gold. However, the mood may change in the next few hours as the US ISM Non-Manufacturing Index is due.

Technically, gold prices are trading sideways between the October 11 low of $1473.68, and the October 25 high at $1518.41. The benefit of this well-defined rectangle pattern is that when the price finally starts trending the price should hopefully not look back and reach its target. The pattern also provides price targets

The EUR to GBP (EURGBP) pair rose to the highest level since March 31 as the market reacted to news from the European Union.

Angela Merkel and Macron financing deal

The biggest news affecting the EURGBP pair was a financing deal reached by Angela Merkel and Emmanuel Macron. The two leaders, who held a virtual meeting earlier today, agreed to a financing deal worth more than $547 billion financing deal that will support the most affected European countries. The new deal will be financed by additional borrowing and the EU framework. The bonds issued will be repaid from the European Union budget. Germany is the biggest contributor to this fund.

The new deal, which will need to be passed by other EU members, will end a streak of disagreements by the members. The wealthier northern states have disagreed with their southern counterparts on how long-term funding should be done. While the southern members, have supported grants, the northern members support loans.

EURGBP fundamental analysis

EUR to GBP gains as Auto sales disappoint

The EURGBP pair also reacted to the latest auto sales from the region. The numbers, released by the European Free Trade Association showed that auto sales dropped to the lowest level in decades in the region. The worst-affected country were in Spain, where sales dropped by 91 per cent. In Germany and Italy, the sales dropped by 61% and 84% respectively.

Analysts believe that sales will start to gain as countries start to reopen their economies. Still, with many people struggling to find jobs, they believe that it will take a longer period for them to buy cars. In Germany, authorities are considering offering incentives that will help people buy cars.

Another big mover of the EURGBP pair was the tariffs that were announced by the UK. In a statement, the Boris Johnson administration said that it will remove most tariffs.

EURGBP technical analysis

The EUR to GBP pair rose to an intraday high of 0.8960, which is the highest level since March 31. On the daily chart, the price is above the 100-day and 50-day exponential moving average and slightly above the 50% Fibonacci retracement. The EURGBP is also forming a pattern similar to cup and handle. As such, there is a possibility that it will continue rising as bears attempt to test the important resistance level of 0.9000.

On the flip side, a move below 0.8800 will invalidate this trend. This is an important psychological level that is also slightly above the 50-day and 100-day EMA.

Don’t miss a beat! Follow us on Telegram and Twitter.

EURGBP forecast

EURGBP

More content

Related Posts: