EUR/GBP Forecast – Euro Broke Major Support Vs British Pound

EUR/GBP Forecast – Euro Broke Major Support Vs British Pound

  • – The Euro after trading a few pips above 0.8500 against the British Pound failed and moved down.
  • – The EUR/GBP pair traded lower and broke a major bullish trend line at 0.8455 on the hourly chart.
  • – Today in the Euro Zone, the German Factory orders for March 2017 (MoM) released by the Deutsche Bundesbank posted a rise of 1%, more than the forecast of 0.8%.

 

German Factory Orders

Today in the Euro Zone, the German Factory orders for March 2017 was released by the Deutsche Bundesbank. The market was positioned for the factory orders to increase by 0.8% in March 2017, compared with the previous month.

 

However, the result was a lot better than the market forecast, as the factory orders posted an increase of 1%. The last reading was also revised up from 3.4% to 3.5%. When we look at the yearly change in the factory orders, then there was a rise of 2.4%, which was less than the last revised reading of 4.7%. The report stated that the “domestic orders decreased by 3.8% while foreign orders increased by 4.8% on the previous month. New orders from the euro area were up 6.8% on the previous month, new orders from other countries increased 3.5% compared to February 2017”.

 

Overall, the result was above the forecast, but the Euro may remain under pressure, and EUR/GBP could further decline towards 0.8420 in the near term.

 

EUR/GBP Technical Analysis

The Euro slowly moved higher and traded towards 0.8508 against the British Pound. There was no proper close above 0.8500 in EUR/GBP, resulting in a downside move. The pair traded lower and broke the 23.6% Fib retracement level of the last wave from the 0.8404 low to 0.8508 high.

 

EUR/GBP Technical Analysis Euro British Pound

 

The downside was extended, as the pair fell below the 100 hourly simple moving average, and also broke a major bullish trend line at 0.8455 on the hourly chart. Later, it also cleared the 50% Fib retracement level of the last wave from the 0.8404 low to 0.8508 high.

 

Clearly, the pair is under pressure, and may continue to decline towards 0.8420. If there is a correction from the current levels, the EUR/GBP pair may face resistance near 0.8455 or 0.8460. On the downside, a close below 0.8440 might take the pair towards 0.8420 or 0.8400.

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