EURGBP has remained entrenched in a bearish downtrend over the past six trading sessions, with today's focus squarely on key economic data emerging solely from the Eurozone. As traders await the release of the Consumer Price Index (CPI) figures, the currency pair's trajectory is poised delicately amidst technical signals and market sentiment.
In the Asian trading session, on the 1-hour timeframe chart, EURGBP displayed signs of a pullback, attempting to test the Exponential Moving Average (EMA) 50. However, it faltered in reaching this level, with a bearish engulfing candlestick forming at the open of the European/London trading session. This occurrence hints at robust resistance near EMA 50 and the upper band of the Bollinger band, setting the stage for potential downside movement.
All indicators are aligning with the prevailing bearish sentiment. Long-term indicators such as EMA 50 and 200 confirm the downtrend, with EMA 50 positioned below EMA 200. Additionally, both the Moving Average Convergence Divergence (MACD) and the Relative Strength Index (RSI) signal further bearish momentum. Despite a brief pullback following RSI reaching oversold levels, it failed to sustain above the 50% threshold, retracting back below it.
Market analysts suggest that the overall outlook for EURGBP remains bearish, with the potential for further decline contingent upon the CPI release. Should the CPI data disappoint, exacerbating concerns over inflation, EURGBP could face intensified selling pressure. Conversely, a better-than-expected CPI print may instigate a break above EMA 50, with potential tests of EMA 200 serving as the next resistance level.
Traders are advised to closely monitor the CPI announcement and its impact on EURGBP, as market dynamics are likely to evolve rapidly in response to the data release. With technical indicators and fundamental factors aligning, the currency pair's future trajectory hinges significantly on the outcome of today's economic news.
Forecast 2.4% vs Previous 2.4%
Forecast 0.3% vs Previous 0.6%
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