The cross is approaching interesting support at 0.800. The area includes the 100fe, which coincides with the 80.0 Fibonacci retracements. Breaking below the level would increase the chances of continuing down towards 0.8750 its 200EA Weekly. Watch how the price action develops around 0.8800.
In its latest World Economic Outlook, the IMF now expects the global economy set to expand 5.5% this year, a small upgrade from October’s forecast. At the same time, the fund downgraded the UK by 1.4% percent to 4.5% in 2021.
IMF also highlighted that the “euro area and the United Kingdom activity is expected to remain below end-2019 levels into 2022.”
Macros: UK’s unemployment rate in the three months to November climbed to the highest since 2016. The redundancy rate reached a record high of 14.2 per thousand.
Rob Dobson, Director at IHS Markit, said, “Whereas many countries are seeing manufacturers provide a much-needed support to economic growth as the service sector is hit by COVID-19, the UK’s manufacturing sector has come close to stalling.”
Looking ahead, we will get Services PMI for the EA and UK.
TECHNICAL OVERVIEW
The euro has continued downward momentum against the pound over the past week after breaking back below the 0.8860 levels. We expect downward momentum to remain in place in the week ahead. It could accelerate further if key support at 0.8800 is broken decisively.
On the higher side, 0.8860 and 0.8920 are acting as resistances as long as 0.8920 is serving resistance wait for 0.8750 and 0.8700 levels.
It is important to always keep in mind the risks involved in trading with leveraged instruments.
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