EUR/GBP Steady at 0.8335 – Descending Triangle Pattern in Highlights
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- EUR/GBP gained some support probably because of the price correction and the return of the risk-off market sentiment.
- German Industrial Production declined to -0.2% against the expected 1.1%.
- EUR/GBP is trading at 0.8340, having formed the descending triangle pattern on the 4-hour chart.
The EUR/GBP pair is trading sideways, maintaining a narrow trading range of 0.8375 to 0.8334. The day before, the EUR/GBP was closed at 0.8357 after placing a high of 0.8367 and a low of 0.8336. EUR/GBP corrected its price movement and turned green on Friday but struggled to find some specific direction to move on.
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The EUR/GBP gained some support probably because of the price correction and the return of the risk-off market sentiment. For instance, the British pound was facing pressure after the risk appetite from the market disappeared. That’s due to the latest comments from the WHO head. According to WHO, it would not be wise to consider and call the Omicron variant “mild” because coronavirus cases throughout the world were rising to their highest levels.
A quick economic events outlook
On the data front, at 12:00 GMT, the German Industrial Production declined to -0.2% against the expected 1.1%. The German Trade Balance also dropped to 10.9B against the forecasted 12.7B. Both of the events weighed on the single currency Euro. At 12:45 GMT, the French Consumer Spending rose to 0.8% against the forecasted 0.5% and supported Euro. The French Industrial Production dropped to -0.4% against the predicted 0.5% and weighed on the Euro.
The French Trade Balance also fell to -9.7B against the estimated -7.2B and weighed the single currency Euro. At 15:00 GMT, the CPI Flash Estimate rose to 5.0% against the predicted 4.8% and supported Euro. The Core CPI Flash Estimate also increased to 2.6% against the forecasted 2.5% and supported the single currency Euro. The Retail Sales also rose to 1.0% against the predicted -0.4% and supported Euro. Most data from Europe favored currency, which pushed EUR/GBP further to the upside.
A mixture of economic UK events to support EUR/GBP
From the UK side, at 12:00 GMT, the Halifax HPI remained flat with projections of 1.1%. At 14:30 GMT, the Construction PMI rose to 54.3 against the projected 53.9 and supported British Pound. The Housing Equity Withdrawal for the quarter declined to -7.1B against the estimated 3.8B and weighed on British Pound. Mixed data from the UK kept GBP under pressure and pushed EUR/GBP higher.
The British pound moved sideways as the increasing coronavirus cases, and severe NHS staff shortages placed heavy pressure on GBP. On the other hand, the increased expectations of an early interest rate hike from the Bank of England supported the British pound.
Over the past week, the UK has reported more than 150,000 coronavirus cases every day, which prompted the UK government to bring in about 200 Armed Forces members to help support the NHS operations in London. The staff absences at hospitals across England increased by 60% amid the rapid spread of coronavirus in the region and dragged GBP lower.
EUR/GBP price forecast – Daily Technical Levels
Support Resistance
0.8348 0.8363
0.8343 0.8373
0.8333 0.8378
Pivot Point: 0.8358
EUR/GBP price forecast – Descending triangle pattern support at 0.8335
The EUR/GBP is trading at 0.8340, having formed the descending triangle pattern on the 4-hour chart. The pattern is extending resistance at 0.8375 along with support at 0.8335. A break below the 0.8335 level exposes the EUR/GBP price towards the 0.8300 level.
In the 4-hour timeframe, the EUR/GBP pair’s significant resistance stays at the 0.8435 level. A spike in demand can slice through 0.8375 levels to each 0.8420 or 0.8460 resistance levels.
Typically, the descending triangle patterns tend to break out on the bearish side. Therefore, a break below the 0.8335 support level can lead EUR/GBP price towards 0.8301 or 0.8260 levels.
The RSI and Stoch RSI are supporting a downtrend in the EUR/GBP pair; therefore, a break below the 0.8335 level may help us capture selling trades in EUR/GBP pair. All the best, and stay tuned for more updates!
