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Euro Looks for More Gains against the British Pound

Euro

The euro currency is moving higher against the sentiment linked British pound. During the Asian trade session, the EUR/GBP currency exchange rate is trading around 0.8544/3. Market sentiment is still sour which is taking its toll on the sentiment linked British pound.

The Omicron Covid-19 variant is having an impact on the Forex markets and other financial markets. On Monday, the euro currency moved higher from 0.85 to 0.8520 as Forex traders looked for safe haven asset classes.

The first Omicron coronavirus death has been identified in the United Kingdom. UK Prime Minister Boris Johnson is encouraging booster shots. The British pound continues to weaken which is boosting the EUR/GBP Forex pair.

Today, the United Kingdom will publish key labor data. The UK is releasing their monthly claimant count change, 3M/3M unemployment rate and average earnings including bonus. The European Union will publish their monthly industrial production figures.

The United States will publish their core and headline monthly producer price index (PPI). The American Petroleum Institute (API) will release weekly crude oil inventory data.

Daily Euro Currency Technical Report (EUR/GBP)

Looking at the above daily MT 4 price action chart, the euro currency will face stiff technical resistance at 0.8550. The bears remain dominant in the EUR/GBP currency exchange rate while below the 200 day simple moving average. Overnight, the euro currency challenged he 200 day simple moving average around 0.8510/1.

A break above the 200 day simple moving average opens the door for 0.8555. The next upside barrier is at a falling trend from April. This upside level is near 0.8575 with 0.8595 then coming into play. Also on the upside, 0.86 lies in wait.

On the downside, the EUR/GBP Forex pair has technical support at the 100 day simple moving average. This layer of support is around 0.8510/1. The next downside level lines up at 0.85. Below that is the 50 day simple moving average around 0.8480.

About David Frank

David has his MA and PhD in Economics. He is a technical analyst who has been trading in the Forex world for over a decade. As an analyst and trader, David believes in the big picture by blending together technical analysis with the fundamentals behind the scenes in the Forex and Bond markets. David’s trading strategy is unique. He blends an understanding of fundamental and macroeconomics with technical analysis to offer a unique view into Forex. He applies several strategies including carry long positions, to take advantage of high yields in non-volatile markets, as well as using quicker, chart related analysis for day trading.

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