The EUR’s position against the pound failed to alter on postponing the UK location by four weeks. We expect there will be no significant economic impact by the delay. Hence, GBP remains muted against the EUR and the dollar too.
Economic data from last week continue to print strong, with UK GDP is estimated to have grown by 2.3% in April 2021, the fastest monthly growth since July 2020, as government restrictions affecting economic activity continued to ease, according to the ONS.
Diving into the sectoral wise, Services have been the main contributor to GDP’s recovery in recent months, following significant falls in January because of coronavirus restrictions.
Services output grew by 3.4% in April 2021 but remained 4.1% below its pre-pandemic level of February 2020. However, the monthly production fell by 1.3% between March-April 2021.
This week we will get the Unemployment rate on Tuesday and CPI figure on Wednesday. We expect both the data points continue to print on the higher side. Hence GBP to remain flat against the EUR this whereas against the dollar, we are waiting for a breakout higher for bullish confirmation.
Last week’s expected ECB meeting and lockdown announcement news could give us a direction. But both the events failed to provide life to the EURGBP price action. So, we expect the technical landscape remains unchanged this week as well.
The weekly pivotal spread between 0.8580-0.8560, below here 0.8530 and 0.8500 and 0.8470 exists—overall thick multi-layer support available below 0.8530 levels.
Any violation of the 0.8470 level may cause a clean slide towards 0.8400 and 0.8300 levels. Flipside, any decisive breakout above 0.8720 levels may provoke strength towards 0.8860. Until such time, wait for support levels.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
What is your Technical View?
Do you have a different idea? Please leave us a comment and get an answer from our professional analysts