EUR/GBP Forecast – Euro Recoveries to Remain Capped Vs British Pound
- – The Euro failed to move above 0.8920 and started declining against the British Pound.
- – There is a major contracting triangle forming with current resistance at 0.8880 on the hourly chart of the EUR/GBP pair.
- – Recently in the Euro Area, the German Factory orders for Nov 2017 was released by the Deutsche Bundesbank.
- – The outcome was below the forecast of +0.8% as there was a decline in the index by 0.4%.
German Factory Orders
Recently in the Euro Area, the German Factory orders for Nov 2017 was released by the Deutsche Bundesbank. The market was positioned for a rise of 0.8% in the orders in Nov 2017 compared with the previous month.
The actual result was below the forecast of +0.8% as there was a decline in the index by 0.4%. Looking at the domestic orders, there was a decline of 0.4%, but the foreign orders fell by 0.5% compared with the previous month.
Overall, the EUR/GBP pair may not recover in the short term, and it could test the 0.8850 support area in the near term.
EUR/GBP Technical Analysis
The Euro made a decent ground from the 0.8850 low and traded above 0.8900 against the British Pound. The EUR/GBP pair traded as high as 0.0.8923 where it faced sell offers. Later, the pair started a downside move and traded below the 0.8900 support plus the 100 hourly simple moving average.
More importantly, there was a break below the 50% Fib retracement level of the last wave from the 0.8847 low to 0.8923 high. At the moment, it seems like there is a major contracting triangle forming with current resistance at 0.8880 on the hourly chart.
The pair is currently struggling and is below the 61.8% Fib retracement level of the last wave from the 0.8847 low to 0.8923 high. Therefore, there are chances of a downside move back towards the 0.8850 swing low in the near term.
Should there be a short term correction toward 0.8870 and 0.8880, the pair could face selling interest. Only a close above 0.8880 and the 100 hourly SMA could reduce the current bearish pressure on EUR/GBP.
Also published on Medium.
