Key Highlights
- The Euro made a nice upside move and traded above the 0.8920 resistance against the British Pound.
- There is a connecting bullish trend line forming with support at 0.8920 on the 4-hours chart of EUR/GBP.
- The Euro Zone Gross Domestic Product increased 0.6% in Q4 2017, similar to the market forecast.
- Today, the ECB Interest Rate Decision will be announced, and the central bank is likely to keep rates at 0%.
EURGBP Technical Analysis
The Euro started a fresh upside wave from the 0.8840 level against the British Pound. The EUR/GBP pair traded above 0.8900 and moved into a positive zone.
During the upside move, the pair broke a major bearish trend line with resistance at 0.8830 on the 4-hours chart. Moreover, there was a break above a crucial resistance zone at 0.8910-20.
It opened the doors for more gains and the pair traded toward the 1.236 fib extension of the last decline from the 0.8951 high to 0.8884 low. If the current trend continues, the pair may even test the 1.618 fib extension of the last decline from the 0.8951 high to 0.8884 low.
On the downside, there is a connecting bullish trend line forming with support at 0.8920 on the 4-hours chart. However, the most important support is near 0.8910, which was a resistance earlier.
Recently, the Euro Zone Gross Domestic Product for Q4 2017 was released by the Eurostat. The market was looking for a rise of around 0.6% in the GDP compared with the previous quarter.
The result was similar to the forecast as there was a 0.6% rise. In terms of the yearly change, there was a rise of 2.7%, similar to the forecast and the last reading.
Overall, the Euro may continue to rise versus the British Pound, and the 0.8900-10 support area remains a crucial zone for EUR/GBP.
Economic Releases to Watch Today
- German Factory Order for Jan 2018 (MoM) – Forecast -1.6%, versus +3.8% previous.
- ECB Interest Rate Decision – Forecast 0%, versus 0% previous.
- US Initial Jobless Claims – Forecast 220K, versus 210K previous.
