EURGBP & GBPCAD, 30M
Eurozone construction output dropped -0.4% m/m in October, while Eurozone labour costs rose 1.6% y/y in Q3, down from 1.8% y/y in the second quarter of the year. Annual rates vary significantly across Eurozone countries even among the big four, with the 0.1% y/y rise in Spain contrasting sharply with the 2.2% y/y rate in Germany. The headline number includes wage as well as non-wage labour costs, but overall the slowdown in the headline rate backs Draghi’s point that wage growth and underlying inflation pressures so far remain modest, despite the surprisingly strong growth numbers.Meanwhile, the weaker than expected German Ifo reading it is adding to arguments against an overly optimistic growth environment.
The common currency stalled at low 1.18s against USD, this morning after bounce from 1.1775, while EURGBP retests yesterday’s high again up to 0.8840. The intra-day price action of EURGBP is bullish, with pair holding above its 70% recovery from Friday’s losses. Despite the lack of direction seen in the 30minutes chart, due to the missed in German IFO and the missed in EU Labour cost, the pair closed above the 1st intra-day resistance at 0.8832 in the bottom of the hour.
The R1 in the pivot analysis, can be consider as a retracement level, since pair failed to break this level 8 times since yesterday, returning lower. Hence with Stochastic turning below 80, along with the last bearish 30-minutes candle, indicating negative intraday momentum, a SHORT position was triggered at 0.8825, with Targets at 50-period MA at 0.8810 and at 0.8800 which is also the confluence of 32.8% Fibonacci level seen since November 28 peak and 200-period MA in the hourly chart. Support for this entry was set at recent swing high, at 0.8850.
In the big picture such as the Daily chart, pair presents to move in an uptend in December, however strong resistance at 50-Day MA at 0.8860 needs to be breached and break in order to shift back to a more bullish bias. However, the momentum indicators such as Stochastic and RSI are montly neutral, which makes the upside move quite doubtful scenario for now.
Similar, strength of Pound has been noticed in GBPCAD chart, with the pair rejecting the 200-period EMA level at 1.7180, while it is traded in the upper Bolinger Bands pattern above all 3 MAs n the 30-Minute chart. Hence pair is likely to Retest the recent swing high at 1.7240. A LONG position was triggered at 1.7210, and targets at recent swing high at 1.7240 and 1.7260. Support was set at 1.7160.
Click here to access the HotForex Economic calendar.
Want to learn to trade and analyse the markets? Join our webinars and get analysis and trading ideas combined with better understanding on how markets work. Click HERE to register for FREE! The next webinar will start in:
Disclaimer: This material is provided as a general marketing communication for information purposes only and does not constitute an independent investment research. Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of buying or selling of any financial instrument. All information provided is gathered from reputable sources and any information containing an indication of past performance is not a guarantee or reliable indicator of future performance. Users acknowledge that any investment in FX and CFDs products is characterized by a certain degree of uncertainty and that any investment of this nature involves a high level of risk for which the users are solely responsible and liable. We assume no liability for any loss arising from any investment made based on the information provided in this communication. This communication must not be reproduced or further distributed without our prior written permission.