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EURGBP – Buy Dips Favored

Key Points

  • The Euro is following a nice bullish trend against the British Pound and looks set for more gains.
  • There is a support trend line formed on the 4-hours chart, which is acting as a buying area.
  • There is a chance of EURGBP testing the all-important 0.7400 resistance area.
  • Today, the Italian Consumer Confidence released by Istat posted a reading of 117.6 for November 2015, which was better compared with the forecast of 117.0.

Technical Analysis

The Euro continued to move higher against the British Pound, and currently forming a bullish trend line on the 4-hours chart, which is acting as a support area for buyers. The 50 simple moving average (4H) is positioned with the trend line and support area, pointing the importance of it.

If the pair corrects lower from the current levels, then it may find bids near the 50 MA, as the 38.2% Fib retracement level of the last leg from the 0.7164 low to 0.7415 high is coinciding with it.

On the upside, the 0.7400-10 resistance area remains a hurdle for buyers. A break above it may call for more gains.

Italian Consumer Confidence

Today, the Italian Consumer Confidence, which is a survey of the consumer opinions in Italy was released by the Istat. The forecast was slated for a decline from the last reading of 118.4 to 117.0 in November 2015. However, the outcome was a positive one, as the decline was minimal and the Italian Consumer Confidence came in at 117.6.

The report stated that the “confidence climate index decreased in December 2015 from 118.4 to 117.6. All components decreased: economic, personal, current and future, which lowered from 157.9 to 152.9, from 105.0 to 104.5, from 111.6 to 109.1 and from 128.0 to 127.3, respectively”.

The report was encouraging to lift the market sentiment in favor of the bulls. However, looking at the current technical conditions it looks like EURGBP may trade higher.

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