Economic Sentiment Indicator in the eurozone for July came out the highest since 2011. Other releases published today turned out to be better than their forecasts as well.
Nevertheless, the UK economy looks stronger. The latest GDP figure for the second quarter of the year in the UK amounted to 0.7%, or to 2.6% yearly. At the same time, labor productivity increased as unemployment slightly grew amid growing GDP. The figures can be compared tomorrow at 12 pm (GMT +3) when the Unemployment Rate and Consumer Price Index for July are published in the eurozone.
The pair’s fall is also a result of soft monetary policy by the ECB, while the Bank of England is planning to start increasing the interest rate, most likely, in the beginning of 2016.
Thus, in the medium-term, the EUR/GBP pair is going to continue falling.
Support and resistance
The pair continues falling towards 2007 lows at 0.6900.
OsMA and Stochastic on all price charts give sell signals.
Support levels: 0.7000, 0.6940, 0.6920.
Resistance levels: 0.7065, 0.7130, 0.7200.
Open short positions from the current levels and from 0.7130, 0.7100, 0.7065 with targets at 0.6940, 0.6920, 0.6900 and stop-loss at 0.7160.
Long positions can be opened after the breakout of the level of 0.7200 (with the appropriate indicators signals) with targets at 0.7300, 0.7390, 0.7480.