EUR/GBP has been quite volatile and corrective at the edge of support area of 0.8880 from where further bullish momentum is expected in this pair. EUR has been dominating GBP for a few weeks, whereas GBP has still been weighed down by the BREXIT impact and economic reports with mixed readings.
GBP has been quite indecisive in light of mixed figures in economic reports this week. Indeed, positive GDP data and Average Earning Index were overshadowed by a decline in Manufacturing Production and an increase in Claimant Count Change. Moreover, the Bank of England left the key policy rate unchanged as expected at 0.75%. Today Bank of England’s Governor Carney is going to speak about further plans regarding wrapping up the BREXIT issue in the coming weeks and about monetary policy decisions. Today’s speech is expected to inject certain volatility and determine market sentiment for the nearest days.
On the other hand, EUR has been quite solid in light of the recent economic events and reports this week that is expected to lead to further gains over GBP in the process. In the context of the trade talks and tech fuel rally in European stocks, the currency has gained good momentum. Today eurozone’s Trade Balance report is going to be published which is expected to decrease to 16.3B from the previous figure of 16.7B.
Meanhwile, though eurozone’s economic report today is expected to reveal soft figures, any positive actual reading in the report is sure to encourage further momentum for EUR against GBP. EUR is likely to keep momentum for long.
Now let us look at the technical view. The price has rejected 0.8880 area with daily candles for several times which does indicate the presence of the bulls at the area whereas having a long-term bullish trend in place, the price is expected to push higher with target towards 0.9050 resistance area in the coming days. While being inside the rising channel and being above 0.8850 area with a daily close, the bullish bias is expected to continue.
MOMENTUM: VOLATILE and IMPULSIVE
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