Key Points
- The Euro traded lower against the British Pound recently and broke the 0.8530 support.
- The EURGBP pair is currently correcting higher, but may face resistance near 0.8530 and 0.8545.
- Today, the UK Net Borrowing figure was released by the National Statistics.
- The outcome was better than the forecast of £6.000B, as there was a decline to £4.301B in Oct 2016.
EURGBP Technical Analysis
The Euro recently declined from the 0.8641 high to 0.8492 low against the British Pound. The EURGBP pair is currently correcting higher and trading near the 23.6% Fib retracement level of the last drop from the 0.8641 high to 0.8492 low.
There are many resistance levels on the way up, including 0.8530 and 0.8545. The most important one is near the 21 hourly simple moving average, positioned with the 38.2% Fib retracement level of the last drop from the 0.8641 high to 0.8492 low.
So, one may consider selling on rallies as long as the pair is below the 21 hourly SMA and 0.8550. On the downside, the recent low of 0.8500 may act as a support. A close below it may call for further declines in the short term in EURGBP.
UK Net Borrowing
Today during the London session, the Net Borrowing, which captures an amount of new debt held by the U.K. governments (the financial deficit in the UK national accounts) was released by the National Statistics.
The market was looking for a reading of £6.000B in Oct 2016, down from the last reading of £10.118B. However, the result was positive, as there was a decline to £4.301B.
Overall, the EURGBP pair may correct a few more pips higher, but most likely to face sellers on the upside near the 21 hourly SMA.
