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EURGBP is Correcting at the End of the Week
4/21/2023 12:01 PMThe EUR/GBP pair shows ambiguous trading dynamics, holding near 0.8815. Market activity remains quite low, despite the release of a fairly large amount of macroeconomic statistics from Europe and the US.
The focus of investors was data on the dynamics of production inflation in Germany. In March, the Producer Price Index fell by 2.6% after -0.3% in the previous month, while analysts expected -0.5%, and in annual terms, the indicator sharply slowed down from 15.8% to 7.5%, which also turned out to be significantly lower than market forecasts at the level of 9.8%. Some support for the single currency was also provided by data on the Trade Balance in the euro area. In February, the seasonally adjusted indicator finally entered the surplus zone, fixing at the level of 4.6 billion euros, while a month ago the balance remained in deficit at -30.6 billion euros, while analysts' forecasts assumed an improvement in dynamics only to -22.3 billion euros.
Today, the focus of investors will be the April statistics on business activity in the manufacturing sector and the services sector of the eurozone from S&P Global. Also during the day, European Central Bank (ECB) representatives Frank Elderson and Luis de Guindos are expected to speak. In addition, investors are waiting for the publication of March data on the dynamics of Retail Sales in the UK. It is assumed that the indicator in monthly terms will decrease by 0.5% after rising by 1.2% in the previous month, and in annual terms, the market expects an improvement in dynamics from -3.5% to -3.1%.
Bollinger Bands in D1 chart show insignificant growth. The price range is narrowing, reflecting ambiguous dynamics of trading in the short term. MACD is going down preserving a previous sell signal (located below the signal line). Stochastic is showing similar dynamics; however, the indicator line is rapidly approaching its lows, indicating the risks of oversold euro in the ultra-short term.
Resistance levels: 0.8820, 0.8841, 0.8863, 0.8900. | Support levels: 0.8800, 0.8783, 0.8750, 0.8727.
