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EURGBP Instrument Develops Flat Dynamics

9/14/2022 12:44 PM

During the Asian session, the EUR/GBP pair weakens slightly, consolidating near 0.8670.

Yesterday, the euro tried to grow, but the market was focused on the US macroeconomic statistics, and therefore both the pound and the euro fell significantly against the US dollar. Thus, the consumer price index added 0.1% in August, while analysts expected a negative correction by a similar amount and slowed down from 8.5% to 8.3% YoY, which also was worse than the preliminary estimates of experts of 8.1%. Consumer price statistics reduced positive market expectations regarding the effectiveness of monetary policy pursued by leading central banks but increased the likelihood of a US Federal Reserve rate hike by 75.0 basis points next week.

Yesterday, the pressure on the pound was exerted by a poor report on the labor market in the UK: Claimant Count Change in August increased by 6.3K after falling by 14.5K over the previous period, although experts' forecasts suggested a decrease by 9.2K. At the same time, the average wage without bonuses increased by 5.2% in July, although an increase of only 5.0% was expected. According to data from the International Labor Organization (ILO), the unemployment rate for the same month fell from 3.8% to 3.6%. On Wednesday, British investors expect the publication of statistics on consumer inflation for August.

On the daily chart, Bollinger Bands are steadily growing: the price range is narrowing, reflecting the emergence of ambiguous trading dynamics in the short term. The MACD indicator is falling, keeping a poor sell signal (the histogram is below the signal line). Stochastic, reversed at "80", develops a downward trend, signaling the prospect of a "bearish" trend in the ultra-short term.

Resistance levels: 0.8692, 0.8720, 0.8750, 0.8800. | Support levels: 0.8645, 0.8616, 0.8585, 0.8560.

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