Selling EUR/GBP at the 20 SMA After the Retreat Higher
The retrace higher in EUR/GBP seems complete on the H4 chart, so we decided to open a sell forex signal
The GBP has remained slightly bid across the board recently, buoyed by the positive impact of the appointment of Rishi Sunak as the UK Prime minister. His commitment to restoring economic stability has eased the turmoil caused by his Liz Truss’ economic plan which has offered a needed bounce to the GBP.
Besides the absence of relevant economic releases in the UK, the Eurozone calendar has failed to provide support to the euro. The preliminary German and Eurozone GDP figures showed that the economy of the Eurozone has avoided recession for now, although CPI inflation numbers have confirmed that consumer inflation continues to grow out of control.
EUR/GBP H4 Chart – Is the Retrace Complete?
The 20 SMA is turning into resistance
As a result, EUR/GBP has been bearish recently and moving averages gave turned into resistance at the top. Yesterday we saw a retrace higher on the H4 chart, although the 20 SMA (gray) turned into resistance on the H4 chart, where we decided to open a sell forex signal. The Eurozone released yesterday:
Eurozone Q3 GDP Report
- Eurozone Q3 Prelim Flash GDP 0.2% vs 0.1% forecasted
- Q2 GDP reading came at 0.7%, revised to 0.8%
- GDP YoY Prelim Flash 2.1% vs 2.1% forecasted
- Previous GDP YoY was 4.1%
Reuters Note
The European Union’s statistics office Eurostat estimated that gross domestic product in the 19 countries sharing the euro rose 0.2% quarter-on-quarter for a 2.1% year-on-year rise, as expected by economists polled by Reuters.
This compares with a 0.8% quarterly and 4.3% year-on-year growth in the April-June period, as the Eurozone economy begins to feel the impact of soaring inflation, especially of energy prices after Russia’s invasion of Ukraine, and the resulting jump in interest rates and continued supply chain problems.
Germany, Europe’s biggest economy, bucked the wider trend and reported a slight acceleration of quarterly growth in the third quarter to 0.3% from 0.1% in the second quarter, though its economy still decelerated in year-on-year terms.
EUR/GBP Live Chart
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