EURGBP trades higher for the fourth consecutive trading session as investors increase bets for a rate cut by the Bank Of England after weaker GDP and manufacturing data. Recent dovish comments from three MPC members also weigh on the British pound. According to CME Bank of England Tool now the possibilities of a rate cut in the January 30 policy meting have increased to 47%.
The British economy had a tough 4Q in 2019 amid the Brexit uncertainty and the general elections. The UK PM Boris Johnson earlier today said that it is very likely to get a comprehensive trade deal with EU by year-end. Johnson also said that there would be no independence referendum for Scotland as that would continue the political stagnation.
EURGBP pair is pressured by the dismal economic data from the UK while the german manufacturing data shows some signs of stabilization. The pair is 0.02% higher 0.8573 close to daily low. The pair after a strong start that makes fresh two week highs at 0.8595 retreated and as of writing approached the unchanged level.
As the pair approaches the two-month highs sellers might get more aggressive. Immediate resistance will be met at 0.8595 the daily top. Next supply zone stands at 0.8658 the high from November 7th. Bulls need to break above that resistance in order to attract more bids that might push the pair up to the next resistance at 0.8679 the 100-day moving average.
On the flip side, initial support for the pair stands at 0.8565 the daily low. Next support zone would be met at 0.8522 the 50-day moving average. More bids might emerge at 0.8453 the low from December 31st.