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The EURGBP is Trying to Correct at the End of the Trading Week

4/7/2023 12:18 PM

The EUR/GBP pair is showing an uncertain decline, holding near 0.8770. Market activity remains quite low as investors await the publication of the March report on the American labor market.

The macroeconomic statistics from the UK published yesterday was contradictory. The Halifax House Prices added 0.8% in March, slowing down after rising by 1.2% in the previous month, with a forecast of -0.3%. At the same time, S&P Global Construction PMI showed a drop from 54.6 points to 50.7 points, which was significantly lower than the 53.5 points expected by the market. During the week, market participants followed the rhetoric of Bank of England board member Silvana Tenreyro, who mentioned the possibility of lowering the interest rate earlier and faster than planned, as the impact of the previous monetary tightening is already slowing the global economy, besides, the steps of the financial authorities had a positive impact on inflation. In addition, a sharp decline in energy costs exceeds the regulator's preliminary estimates, so the price increase may drop to the target 2.0% sooner than officials expected.

Yesterday, "bullish" sentiment on the euro was supported by statistics from Germany in terms of Industrial Production: in monthly terms, the indicator slowed down from 3.7% to 2.0%, while analysts expected growth by 0.1%, and added 0.6% in annual terms with a projected drop from -1.6% to -2.7%. European Central Bank (ECB) Chief Economist Philip Lane noted that producer inflation in the euro area is still at its peak, acting as a key driver for consumer price growth, but also predicted a slowdown in the dynamics during the year.

Bollinger Bands in D1 chart demonstrate mixed dynamics. The price range remains unchanged, indicating an approximate balance of power in the short term. MACD is growing preserving a weak buy signal (located above the signal line). Stochastic is showing similar dynamics, retreating from the level of "20", which indicates the border of the single currency oversold area. The development of corrective growth of the instrument is possible in the nearest time intervals.

Resistance levels: 0.8783, 0.8800, 0.8820, 0.8841. | Support levels: 0.8750, 0.8727, 0.8700, 0.8660.

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