EUR/GBP Forecast — Euro Recoveries to Remain Capped Vs British Pound

  • - The Euro failed to move above 0.8920 and started declining against the British Pound.
  • - There is a major contracting triangle forming with current resistance at 0.8880 on the hourly chart of the EUR/GBP pair.
  • - Recently in the Euro Area, the German Factory orders for Nov 2017 was released by the Deutsche Bundesbank.
  • - The outcome was below the forecast of +0.8% as there was a decline in the index by 0.4%.

German Factory Orders

Recently in the Euro Area, the German Factory orders for Nov 2017 was released by the Deutsche Bundesbank. The market was positioned for a rise of 0.8% in the orders in Nov 2017 compared with the previous month.

The actual result was below the forecast of +0.8% as there was a decline in the index by 0.4%. Looking at the domestic orders, there was a decline of 0.4%, but the foreign orders fell by 0.5% compared with the previous month.

Overall, the EUR/GBP pair may not recover in the short term, and it could test the 0.8850 support area in the near term.

EUR/GBP Technical Analysis

The Euro made a decent ground from the 0.8850 low and traded above 0.8900 against the British Pound. The EUR/GBP pair traded as high as 0.0.8923 where it faced sell offers. Later, the pair started a downside move and traded below the 0.8900 support plus the 100 hourly simple moving average.

EUR/GBP Technical Analysis Euro British Pound

More importantly, there was a break below the 50% Fib retracement level of the last wave from the 0.8847 low to 0.8923 high. At the moment, it seems like there is a major contracting triangle forming with current resistance at 0.8880 on the hourly chart.

The pair is currently struggling and is below the 61.8% Fib retracement level of the last wave from the 0.8847 low to 0.8923 high. Therefore, there are chances of a downside move back towards the 0.8850 swing low in the near term.

Should there be a short term correction toward 0.8870 and 0.8880, the pair could face selling interest. Only a close above 0.8880 and the 100 hourly SMA could reduce the current bearish pressure on EUR/GBP.


Originally published at — ForexGator.com.