EURGBP Lower Despite Steep Drop in Inflation

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Written By: Kevin George

Dec 16, 2020, 08:55 GMT 08:55

EURGBP

Summary:

EURGBP was trading lower on Wednesday after traders remained hopeful of the Brexit outcome. The pound shook off higher unemployment and low inflation.

The EURGBP was trading lower on Wednesday after traders remained hopeful of a positive Brexit outcome. The pound shook off a higher unemployment rate and a Tier 3 strict lockdown in London to gain on the euro.

Today also saw another drop in U.K. inflation due to cheaper clothing and food prices. The ONS reported that the CPI number had fallen to 0.3% in November from 0.7% in the previous month. The pound strength is a sign that Brexit is in command of the pair.

Traders are now awaiting the services and manufacturing PMI data for the U.K., EU and, German economies. German manufacturing OMI has been strong with a forecast of 56.4, while U.K. services is expected to be nearer 50 due to the lockdown effects on tourism and hospitality.

EURGBP Technical Outlook

EURGBP saw resistance again at the 0.9175 level and has dropped to the 50-day moving average. The next support level is at 0.8870 and this is a well-worn range for the pair. A break of either of the two levels mentioned should lead to a larger move. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.

EURGBP Daily Chart

Written By: Kevin George

Kevin George has over twelve years' experience in financial markets trading, which included stints in London and New York, trading equities and currencies. He has also traded in commodities, equities, futures and options. He has extensive technical-experience and combines this with a fundamental overview. He has published for SeekingAlpha, where he runs his own subscriber newsletter and graduated with an MSc in finance in 2017.