EURGBP
EURGBP trading lower today having test earlier the strong base around 0.8680 which proved strong support as it tested several times after the recent correction from multi-year highs. The pair managed to break above the 50-day moving average but only for two trading days as the sellers overwhelmed the buyers and are threatening the 0.8680 mark.
Weak economic data continue to come from the UK and EU. Earlier today the Ifo institute forecasts that the German economy would contract by 1.9% in Q1; 12.2% in Q2 and 6.6% in 2020. The German economy expected to return to pre-coronavirus crisis levels by the end of 2021.
Analysts expect that the ECB on the Thursday policy meeting will keep interest rates unchanged but will start buying more risky bonds and increase the volume of its bond purchase program to off-set the coronavirus impact on the eurozone economy. ECB is expected to include in the buying plan, even the so-called “fallen angels” bonds that recently lost their investment rating. The central bank launched in March an emergency bond purchase program (PEPP) worth up to 750 billion Euros.
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EURGBP is 0.03% lower at 0.8708, breaking below the 200-day moving average as the correction from multi-year highs continues after a short break higher the previous week. Sellers are in control as long as the pair trades below the 50 and 200-day moving averages.
On the technical analysis side, the first support for the pair stands at 0.8688 the daily low. A settlement below might test the next support zone at 0.8658 the low from March 9 trading session. More bids for the pair might emerge at 0.8628 the 100-day MA.
On the flip side, first resistance for the pair stands at 0.8721 the daily top. A move above might challenge the next resistance at 0.8732 the 200-day moving average. If EURGBP break above 0.8732 then might test the next supply zone at 0.8790 the 50-day moving average.