EUR/GBP is currently making a correction above 0.8850 area from where further bullish pressure is expected in this pair, leading the price towards 0.8950-0.9050 area. EUR has suffered a blow from unsolved Italy's budget deficit and lackluster data from the eurozone. Nevertheless, EUR is likely to assert its stength versus GBP, which has been undermined by the long-lasting Brexit saga and mixed economic reports.
Recently the eurozone's M3 Money Supply report is going to be published with an increase to 3.9% from the previous value of 3.6% which was expected to decrease to 3.5%, German Gfk Consumer Climate report showed a slight decrease to 10.4 from the previous figure of 10.6 which was expected to be at 10.5, and Private Loans remained unchanged as expected at 3.2%. Today French Consumer Spending report is going to be published which is expected to increase to 0.5% from the previous value of -1.7%, French Prelim GDP is expected to be unchanged at 0.4%, Spanish Flash CPI is expected to decrease to 2.0% from the previous value of 2.3%, and German Unemployment Change is expected to increase to -10k from the previous figure of -11k. Moreover, ECB President Draghi is going to speak today about the regulator's plans on further monetary policy which is expected to have a positive impact on the upcoming EUR gains.
On the GBP side, recently the Bank of England released the Bank Stability report and Stress Test results. Another market-moving event was a speech of BOE Governor Carney. All seven British banks passed the test indicating that they could withstand any Brexit scenario, but there are possibilities of BREXIT to have a negative impact on the UK economy which could be greater than 2008's financial crisis. There are also certain chances of economy to have 8% shrinkage in a year leading the GBP to be weaker in the coming days. Today UK Net Lending to Individuals report is going to be published which is expected to decrease to 4.5B from the previous figure of 4.7B, M4 Money Supply expected to increase to 0.3% from the previous value of -0.3%, and Mortgage Approvals is expected to be unchanged at 65k.
Meanwhile, GBP is quite optimistic ahead of the nearest reports. Nevertheless, due to the looming Brexit, the UK economy is expected to have weaker fundamentals than the eurozone. Interestingly, the eurozone's economy is facing some headwinds. Germany revealed contraction in economic growth in Q3. Despite such headwinds in the eurozone, GBP is expected to lose ground quite impulsively in the coming days.
Now let us look at the technical view. The price is currently residing above 0.8850 area while being supported by the dynamic level of 20 EMA. As per current price formation, it is expected to push higher towards 0.8950-0.9050 resistance area in the coming days. As the price remains above 0.8850 with a daily close, the bullish bias is expected to continue further.
SUPPORT: 0.8700, 0.8850
RESISTANCE: 0.8950, 0.9050
BIAS: BULLISH
MOMENTUM: IMPULSIVE and VOLATILE
