EUR/GBP has been quite volatile and corrective in the price range of 0.8950 to 0.9100 area. Recently the eurozone presented downbeat reports. Besides, the ECB expresses cautious optimism on economic development. Notably, GBP is gaining ground despite the BREXIT uncertainty.
EUR has been bit superior to GBP earlier. However, currently downbeat economic data from the eurozone generated bearish pressure in the pair. Recently the ECB wrapped up its 3 trillion dollar-worth bond purchases in December, but ECB President Mario Draghi warns about growing risks and weaker economic data. Though the ECB intends to maintain the interest rate at a record low at least till summer 2019. The regultor is ready to adjust the interest rates to the situation if necessary. Currently the ECB is trying to tackle a slowdown, which if solved may encourage EUR to regain momentum again in the future. Today Italian Industrial Production report is going to be published which is expected to decrease to -0.3% from the previous value of 0.1%.
On the other hand, GBP has been quite firm in light of the recently published economic reports. As a result, GBP halted is picking up steam. Recently UK Halifax HPI report was published with an increase to 2.2% from the previous value of -1.2% which was expected to be at 0.5%. Moreover, Bank of England's Governor Carney spoke about prospects and sustainability of the British economy on the back of the looming BREXIT. The optimistic statement cheered up market sentiment, thoughGBP is unlikely to keep the long-term trend momentum.
Meanwhile, GBP is fundamentally quite stronger than EUR. GBP could extend gains versus EUR for a while. Sustainability of such bearish pressure in the long run is still indecisive and questionable.
Now let us look at the technical view. The price is currently climbing higher after being rejected off the 0.9100 resistance area in an impulsive manner. The price is residing above the dynamic level of 20 EMA whereas certain bearish pressure can be expected to push the price lower towards 0.8950 support area. If broken below with a daily close, the price could move lower towards 0.8850 area in the coming days. As the price remains below 0.9100 area with a daily close, chances of a bearish counter-move will be on rise.
SUPPORT: 0.8850, 0.8950
RESISTANCE: 0.9100
BIAS: BULLISH
MOMENTUM: VOLATILE