Note

EURGBP retreats to 0.8700 area after rejection at 0.8785

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  • The euro fails to break resistance at 0.8785 and retreats to 0.8700.
  • The pound remains bid with the US dollar losing ground.
  • EURGBP is expected to depreciate in the longer-term – Danske Bank.

The euro is pulling back on Monday, giving away gains after a three-day rally last week. The pair was rejected at the 0.8785 resistance area during the early European session before pulling back to the 0.8700 area, against a stronger British pound.

The GBP appreciates amid broad-based USD dollar

The favorable market mood witnessed on Monday, which is weighing further on the safe-haven US dollar, has increased support for the GBP, with investors focusing on the British Government’s plans to tackle UK’s debt crisis.

Finance minister Jeremy Hunt is working on a plan to fill a 50 billion pound deficit in the country’s finances, which contemplates spending cuts between 30 and 35 billion and tax increases of between 20 and 25 billion, according to market sources.

The project will be presented on November 17 with the intention to restore investors’ confidence after the market turmoil triggered by Liz Truss’ tax-cutting program presented in late September.

EURGBP: Expected to move lower in the long term – Danske Bank

Currency analysts at Danske Bank expect the pair to appreciate in the short term and lose ground in the longer term: “We see a case for EURGBP to remain elevated in the near-term, but in the longer-term expect the cross to move lower as a global growth slowdown and the relative appeal of UK assets to investors are positive for GBP relative to EUR.”

Technical levels to watch

EUR/GBP

Overview
Today last price 0.8696
Today Daily Change -0.0064
Today Daily Change % -0.73
Today daily open 0.876
Trends
Daily SMA20 0.8693
Daily SMA50 0.8714
Daily SMA100 0.86
Daily SMA200 0.851
Levels
Previous Daily High 0.8785
Previous Daily Low 0.87
Previous Weekly High 0.8785
Previous Weekly Low 0.8572
Previous Monthly High 0.8867
Previous Monthly Low 0.8572
Daily Fibonacci 38.2% 0.8753
Daily Fibonacci 61.8% 0.8732
Daily Pivot Point S1 0.8712
Daily Pivot Point S2 0.8663
Daily Pivot Point S3 0.8626
Daily Pivot Point R1 0.8797
Daily Pivot Point R2 0.8834
Daily Pivot Point R3 0.8883

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