Following the colossal rejection of 0.9070 last week, we are now finally tested the major support level. The series of bottoms in June, September, and November should now become support, and so if you are bullish EUR into November, then this is the place to take a long trade.
Turning to the COVID situation, Boris Johnson and six Tory MPs have chosen to self-isolate after being exposed to COVID19. UK Prime Minister was admitted to ICU with COVID back in April and is now again exposed to COVID.
UK growth is expected to drift again in Q4, as the second lockdown kicks in since late October. Compared to the 1st lockdown, 2nd lockdown conditions are strict, and as a result, the economy is going to weaken. The latest ONS data shows that the UK economy saw the largest quarterly expansion in the UK economy since the Office for National Statistics (ONS) quarterly records began in 1955.
Solid labor data: Data from our Labour Force Survey (LFS) shows the employment rate has been decreasing since the start of the coronavirus pandemic, while the unemployment rate is now rising sharply. September’s unemployment rate was in line with market expectations.
EURGBP continues to hold the medium-term support level- Will it hold?
The common currency is currently trading at 0.8975 against the pound, representing a gain of 0.15% on Monday. We would be concerned if EURGBP could not push and hold above0.9000 over the next day or two. Traders may need to see what the CPI figures for EA and UK play out before chasing a move in.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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