- The Euro surged higher this week and broke the 0.9150 resistance against the British Pound.
- EUR/GBP broke a crucial bearish trend line at 0.8970 on the 4-hours chart to start uptrend.
- The Euro Area GDP grew 1.1% in Q2 2019 (Prelim) (YoY), more than the 1.0% forecast.
- The Fed lowered interest rates from 2.50% to 2.25%, in line with the market forecast.
- The BoE Interest Rate Decision is scheduled today (forecast – no change from 0.75%).
EURGBP Technical Analysis
The Euro started a significant upward move from the 0.8891 swing low against the British Pound. The EUR/GBP pair broke many hurdles near 0.9000 and 0.9050 to move into an uptrend.
Looking at the 4-hours chart, the pair broke a crucial bearish trend line at 0.8970 to start the recent rally. The bulls pushed the pair above the 0.9100 and 0.9120 resistance levels.
The pair traded to a new monthly high at 0.9190 and settled well above the 100 simple moving average (red, 4-hours). It is currently correcting gains below the 0.9150 level.
An initial support is near the 0.9100 level, below which the pair could test the 38.2% Fib retracement level of the rally from the 0.8891 low to 0.9190 high at 0.9075.
However, the main support is near the 0.9050 level (the previous resistance zone). Moreover, the 50% Fib retracement level of the rally from the 0.8891 low to 0.9190 high is also near the 0.9040 level to act as strong support.
On the upside, an immediate resistance is near the 0.9160 level, followed by the 0.9190 swing high. The main resistance is near 0.9200, where the bulls might struggle.
Fundamentally, the Euro Area Gross Domestic Product report for Q2 2019 (prelim) was released by the Eurostat. The market was looking for an increase of 0.2% in Q2 2019 compared with the previous quarter.
The actual result was similar to the market forecast, as the Euro Zone GDP grew 0.2%. Looking at the yearly change, there was a 1.1% rise in the GDP, more than 1.0% forecast.
Overall, the Euro might correct lower against the British Pound, but it remains supported near 0.9075 and 0.9040. On the other hand, EUR/USD is still trading in a bearish zone below the 1.1200 resistance area.
Economic Releases to Watch Today
- Germany’s Manufacturing PMI for July 2019 – Forecast 45.4, versus 43.1 previous.
- Euro Zone Manufacturing PMI July 2019 – Forecast 46.4, versus 46.4 previous.
- UK Manufacturing PMI for July 2019 – Forecast 47.7, versus 48.0 previous.
- BoE Interest Rate Decision – Forecast 0.75%, versus 0.75% previous.
- US Manufacturing PMI for July 2019 – Forecast 50.0, versus 50.0 previous.
- US ISM Manufacturing Index for July 2019 – Forecast 52.0, versus 51.7 previous.
- US Initial Jobless Claims – Forecast 214K, versus 206K previous.