EURGBP – British Pound Weakness To Continue?

EURGBP – British Pound Weakness To Continue?

Key Highlights            

  • Recent economic releases in the UK failed to help the British Pound and it traded lower not only against the US dollar, but also against the Euro.
  • EURGBP traded above 0.7400-50 resistance area, which pushed the pair higher in the short term.
  • Today, the Euro Area Industrial Production will be released by the Eurostat, which is forecasted to decrease by 0.3% in November 2015.
  • In terms of the yearly change, the Euro Area Industrial Production is forecasted to increase by 1.3% in November 2015.

EURGBP Technical Analysis

The Euro buyers look like under control against the British Pound. It is less due to strength in the Euro and more due to weakness in the British Pound. The GBPUSD kept falling this week, and as a result, there was some upside in the EURGBP pair.

EURGBP chart

The EURGBP pair traded as high as 0.7548 where it found sellers and started to correct lower. However, there is a major bullish trend line formed on the 4-hours chart, which is likely to act as a support area if the EURGBP pair moves down further.

The highlighted trend line and support area acted as a barrier for sellers on many occasions, and it is likely to do so moving ahead. As long as the pair is above it, there is a chance of another rally in EURGBP. However, if sellers manage to clear the trend line and support area, then a down-move is also possible.

Euro Area Industrial Production

Today, the Euro Area Industrial Production, which shows the volume of production of Industries such as factories and manufacturing will be released by the Eurostat. The forecast is slated for a decrease of 0.3% in November 2015, compared with the preceding month. Additionally, the year-over-year change is forecasted to increase by 1.3% in November 2015, compared with the same month a year ago.

Both readings are forecasted to be on the lower side, compared with last readings. If the outcome exceeds the forecast, then the EURGBP pair may rise in the near term. On the other hand, any disappointing report may not be that affective to take the EURGBP down.

Overall, there is a lot of pressure on British Pound bulls, which should keep EURGBP at check moving ahead.

Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies and Financial Market Strategist with a background in IT and financial markets. He specialises in market strategies and technical analysis, and has spent over a decade as a financial markets contributor and observer. He possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin and Ethereum markets.

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