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Alert - 17:05 (CET) - Euro advances 1.5% against the Sterling due to rate differential
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The EurGbp (euro against the sterling) is trading at 0.8045, ranging from 0.7843 to 0.8050. The current price is over yesterday's close at 0.7919. In the hourly graphics, the 20- and 50-day Exponential Mobile Averages (EMA) are over the 200-day EMA.
As the resistance at 0.8052 (October 28th high) is being challenged, the traders are watching the next levels at 0.8125 (October 27th high) and 0.8197 (October 24th high). The supports are set at 0.7838 (October 29th low), 0.7694 (October 20th low) and 0.7607 (23.60% retracement level).
It looks like the Euro and the Sterling like to play "tug-of-war" Since April this year that the pair has been inside the 0.7800 - 0.8100 range. The fact that the both the BoE and the ECB share their views on monetary policies gives no clear direction to the EurGbp.
Next Thursday both central banks will annouce their new interest rates. As the ECB is due to cut 25bp less than the BoE, the Euro is advancing 1.5% this session against the Sterling.
Checking the hourly graphics again, the current price is under the 0.00% (0.8199) and over the 23.60% (0.7607) Fibonacci retracement lines. The Bands of Bollinger are showing a volatility per hour of 210 pips and the 60-minute Relative Strenght Index is at 76 points, overbought.
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