EUR/GBP Price Forecast – Why 0.8360 Could Drive an Uptrend?
Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.
- European Central Bank (ECB) President Christine Lagarde dismissed risks of stagflation in her speech at the Institut Montaigne in Paris on Monday.
- Houthis’ attack on Saudi Arabian oil plants and an increase in China’s COVID numbers also remain in highlight.
- A surge in selling pressure and a breakout of 0.8360 could lead the EUR/GBP pair towards 0.8320.
The EUR/GBP currency pair succeeded in stopping its previous-session downward rally and took some fresh bids around the 0.8366 level. The European Central Bank (ECB) President Christine Lagarde dismissed risks of stagflation in her speech at the Institut Montaigne in Paris on Monday. Lagarde’s latest remarks bolstered the euro currency and helped boost the EUR/GBP currency pair.
The British pound has been under pressure due to a dovish assessment of the Bank of England’s policy decision last week. It has bolstered the EUR/GBP pair more.
Refer to our trading guides to enhance your forex trading skills.
Geopolitical Tensions Continues to Play
Despite the possibility of a negotiated settlement to end Ukraine’s war, investors remain concerned about Russian forces’ massive aerial bombardment of Kyiv, the country’s capital. As a result, the risk-off market mood aided the dollar’s safe-haven status while also weighing on the pound.
In contrast, increased Russian shelling in Ukraine, as well as Kyiv’s refusal to comply with Moscow’s demand that Mariupol is handed over, has highlighted current geopolitical concerns. This eventually was viewed as one of the key factors preventing the EUR/GBP currency pair from gaining any traction.
Fundamentals Outlook
The Houthis’ attack on Saudi Arabian oil plants and an increase in China’s COVID numbers also remain in highlight. Furthermore, Evergrande’s ailing real estate firm’s suspension of trading in Hong Kong is all on the same page.
At this time, the EUR/GBP currency pair is trading at 0.8400 and consolidating between 0.8384 and 0.8404. The market mood remained negative during Tuesday’s Asian session. It’s mostly due to Ukraine’s rejection of Russia’s ultimatum for capitulation in Mariupol.
The Xi-Biden negotiations also influenced the risk-off mood. However, It failed to yield any positive results during their telephone conversation on Friday. The S&P 500 futures fell 0.10 percent intraday to 4,450. Whereas, the US 10-year Treasury yields paused their two-day decline near 2,153 percent, rising 0.05 basis points at the most recent close. Japan’s holiday also limits the movement of US T-bonds in Asia.
The emphasis shifts from the stock market to forex currency pairs as a result of this. As a result, we may see some price movement today.
European Central Bank President Christine Lagarde Speech
In a speech Monday at the Institut Montaigne in Paris, European Central Bank President Christine Lagarde discounted the prospect of stagflation. “Policies to combat climate change will almost certainly raise inflation in the medium term but will be deflationary in the long run,” Lagarde said. In response to Lagarde’s comments, the EUR/USD has maintained its resumed rise above 1.1050. The currency pair is currently trading at 1.1055, up 0.05 percent on the day.
A dovish assessment of the Bank of England’s policy decision last week, on the other hand, weighed on the British pound. In reality, the Bank of England lifted its main rate for the third time in a row, though the 25 basis point increase disappointed investors who had expected a more aggressive boost. Furthermore, the Bank of England changed its stance on the need for future rate hikes, which has bolstered the EUR/GBP pair.
In the absence of any major market-moving economic data, traders will look to Fed Chair Jerome Powell’s scheduled address later in the US session for direction on Monday. In terms of data, the Chicago Fed National Activity Index for February will adorn the calendar with a forecast of 0.29, down from 0.69.
EUR/GBP price forecast – Daily Technical Levels
S3 0.84047
S2 0.84187
S1 0.83615
Pivot Point 0.83617
R1 0.82609
R2 0.82771
R3 0.83228
EUR/GBP price forecast – 38.2% Fib In Focus
The EUR/GBP price forecast remains bearish, as it’s trading at the 0.8365 level. The cross pair has already completed a 23.6% Fibonacci correction, and now it’s heading south for the next support level. Now it’s heading lower towards an immediate support level of 0.8360. This particular support level is being extended by a 38.2% Fibonacci retracement level.
On the lower side, the EUR/GBP’s immediate support may prevail at the 0.8330 level, which is being extended by a 50% Fibonacci retracement level. A breakout of the 0.8330 level exposes the EUR/GBP price towards the next support level of the 0.8305 level. If the downtrend continues, the EUR/GBP price could fall as low as 0.8300, the 61.8% Fib level.
Since the market is in a sell zone, the odds of a bearish trend continuation remain strong, especially below the resistance level of 0.8395. The 50-day exponential moving average is likely to provide resistance near the 0.8396 level. A break above this level could give further room for buying until 0.8450.
A surge in selling pressure and a breakout of 0.8360 could lead the EUR/GBP pair towards 0.8320. Under this, the next target is likely to be 0.8300. We should look for a sell trade under the 0.8375 level and vice versa. All the best, and stay tuned for more updates!
