The 100 SMA Breaks As Resistance for EUR/GBP


EUR/GBP has been under pressure since the last week of September as the Eurozone economy showed increasing deterioration, and the ECB turned increasingly dovish. This pair lost around 100 pips during this time and moving averages turned into resistance at the top once the price fell below them. It was first the 50 SMA (yellow) on the H4 chart which acted as resistance, now it seems like the 100 SMA (green) is doing so.

We saw a significant rebound around the 0.8610-20 zone after the 200 SMA (purple) turned into support for this pair.  But the 100 SMA stood the ground and this pair has been reversing lower since last Thursday. The economic data is not promising for both economies, with the UK manufacturing and industrial production falling by 0.7% and 0.8%, respectively in September. Firms in the United Kingdom have curtailed their manufacturing activity as increased interest rates, supply chain issues, and high inflation have affected overall demand. In addition, enterprises have postponed plans to expand their operational capacity due to rising mortgage rates.

Today we saw the employment report from the UK. Employment was expected to fall by -195K in October, compared to -207K in September, with the unemployment rate staying unchanged at 4.3%. The average earnings without bonuses are forecast to increase to 7.8%, up from 7.8% before, while the average earnings with bonuses are likely to increase to 8.3%, up from 8.5% previously.

UK Employment Report for SeptemberSeptember payrolls change -11k vs 0k priorAugust employment change was -9K 0k; revised to -8k
August average weekly earnings +8.1% vs +8.3% 3m/y expected
July average weekly earnings +8.5%
August average weekly earnings +7.8% vs +7.8% 3m/y expected
July average weekly earnings +7.8%; revised to +7.9%

Keep in mind that this is a partial release with the focus being on the wages data and that is a touch softer than estimated at the balance. Those figures are still high though so the BOE can’t rest on their laurels but at least it is ticking in the same direction as their latest monetary policy pause.

EUR/GBP Live Chart

EUR/GBP





This article was originally published by a www.fxleaders.com . Read the Original article here. .