Trade Idea: EURGBP has been in a range of .8500 to .88 for past 6 months & is poised to break on the higher side after finding support near .85 levels which is multi month support line.
Currently the pair is at the bottom part of the past 6 months price pattern. It is likely to find a support there & move higher towards .87 as more economic data points prove that Eurozone economy is stronger than British economy. Q4CY24 GDP data for European countries such as Spain & Italy surprised on the upside leading to Eurozone not falling into technical recession in CY23. Germany on the other hand has seen stagnant growth but might pick up as Chinese economy picks up. On the other hand, UK retail sales & consumer confidence have come weaker than expected for Dec’23. UK CPI is also likely to fall to 2% by spring of CY24 leading to BOE starting cuts from mid CY24. BOE might give a dovish guidance in it’s 1st Feb meeting which might pull EURGBP higher to .87 levels.
Hence, we recommend to be long EURGBP (CMP .8540), Take Profit around 0.8660 & Stop Loss at .8480
For detailed trade recommendation report, please read the below report in our trade recommendation section:
https://macro-spectrum.com/trade-recommendation/eurogbp-long-trade-reco
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