This week, the pair has been slowly growing against a backdrop of positive statistics for the eurozone. In the first half of the week, the European currency was supported by positive data from Germany, where key indexes moved to the green zone, having exceeded forecasts. However, negative data on the loan sector slightly depreciated the European currency on Thursday. UK retail sales, in their turn, were twice as high as expected and supported the pound considerably. As a result, EUR/GBP has skidded and reached a key support level at 0.7320.
Today, despite negative statistics for UK home prices, the pound has appreciated substantially in the run-up to Bank of England Governor Mark Carney's statement. However, investors do not believe in consolidation of the European currency in spite of the latest positive data from Germany. Strong statistics for UK key industries point to a gradual improvement in the economic situation and therefore the pound is highly demanded.
Support and resistance
In the medium term, EUR/GBP will continue to drop to the levels 0.7215, 0.7180. Afterwards the pair may start consolidating in a narrow range.
Support levels: 0.7290, 0.7275, 0.7250, 0.7215, 0.7180, 0.7155.
Resistance levels: 0.7305, 0.7320, 0.7333, 0.7360, 0.7370, 0.7385.
Increase short positions with profit fixing at 0.7250, 0.7215