EUR/GBP analysis as a double bottom pattern slowly forms

July 11, 2023 11:30 AM BST | By Invezz
 EUR/GBP analysis as a double bottom pattern slowly forms
Image source: Invezz

The euro to pound (EUR/GBP) exchange rate continued the downward trend on Tuesday. The pair dropped to a low of 0.8550, a few points below last month’s high of 0.8656. It has dropped by over 4.8% from the highest point this year.

UK labor market is still strong

The EUR/GBP pair has been in a strong bearish trend in the past few months while the GBP/USD rate jumped to the highest level in 15 months. The most recent GBP news was the latest UK jobs numbers.

Economic data published by the Office of National Statistics (ONS) showed that the economy added over 102k in three months to May. This increase was a few points below the median estimate of 125k.

Wage growth continued rising in May. The average earnings ex bonus jumped by 7.3%, higher than the median estimate of 7.1%. Average earnings plus bonus rose by 6.9%, higher than the median estimate of 6.8%. The unemployment rate came in at 4%.

These numbers mean that the British labour market is strong, with many companies struggling t find workers. At the same time, the country is going through a major cost of living crisis, with inflation being at 8.7%.

Therefore, economists expect that the Bank of England (BoE) will continue hiking interest rates. Most of them see it hiking rates by 0.25% to 5.0%. 

The other important EUR/GBP news on Tuesday was the latest German inflation data. According to the statistics agency, the headline consumer price index (CPI) rose by 0.3% in June after falling by -0.1% in May. Inflation rose by 6.4% on a year-on-year basis.

EUR/GBP technical analysis

EUR/GBP

EURGBP chart by TradingView

The EUR to GBP price has been in a bearish downward trend in the past few months. After peaking at 0.8656 in June, the pair retreated to a low of 0.8520 last week. The pair has moved below the 25-period and 50-period moving averages. It has dropped below the Ichimoku Cloud indicator.

Meanwhile, the MACD indicator has drifted upwards. It is now forming a double-bottom pattern whose neckline is at 0.8656. Therefore, more downside will be confirmed if the price moves below the support at 0.8520. A move below that support will open the possibility of it falling below 0.8500.

The post EUR/GBP analysis as a double bottom pattern slowly forms appeared first on Invezz.


Disclaimer

The content, including but not limited to any articles, news, quotes, information, data, text, reports, ratings, opinions, images, photos, graphics, graphs, charts, animations and video (Content) is a service of Kalkine Media Limited, Company No. 12643132 (Kalkine Media, we or us) and is available for personal and non-commercial use only. Kalkine Media is an appointed representative of Kalkine Limited, who is authorized and regulated by the FCA (FRN: 579414). The non-personalised advice given by Kalkine Media through its Content does not in any way endorse or recommend individuals, investment products or services suitable for your personal financial situation. You should discuss your portfolios and the risk tolerance level appropriate for your personal financial situation, with a qualified financial planner and/or adviser. No liability is accepted by Kalkine Media or Kalkine Limited and/or any of its employees/officers, for any investment loss, or any other loss or detriment experienced by you for any investment decision, whether consequent to, or in any way related to this Content, the provision of which is a regulated activity. Kalkine Media does not intend to exclude any liability which is not permitted to be excluded under applicable law or regulation. Some of the Content on this website may be sponsored/non-sponsored, as applicable. However, on the date of publication of any such Content, none of the employees and/or associates of Kalkine Media hold positions in any of the stocks covered by Kalkine Media through its Content. The views expressed in the Content by the guests, if any, are their own and do not necessarily represent the views or opinions of Kalkine Media. Some of the images/music/video that may be used in the Content are copyright to their respective owner(s). Kalkine Media does not claim ownership of any of the pictures displayed/music or video used in the Content unless stated otherwise. The images/music/video that may be used in the Content are taken from various sources on the internet, including paid subscriptions or are believed to be in public domain. We have used reasonable efforts to accredit the source wherever it was indicated or was found to be necessary.


Sponsored Articles


Investing Ideas

Previous Next