EUR/GBP: Euro fades the 0.8970 resistance ahead of ECB meeting on Thursday
- Traders awaiting ECB meeting over APP details
- 4-hour chart RSI bearish divergence.
The EUR/GBP is trading lower at 0.8930 after making an attempt to break above 0.8970. The RSI on the 4-hour chart is showing a bearish divergence with the current price action suggesting that a consolidation lower is not to be excluded.
EURGBP 4-hour chart
On the macro front, traders are most likely eagerly waiting for the European Central Bank (ECB) meeting on Thursday where Draghi and his colleagues will discuss monetary policy. The ECBank extended its Asset Purchase Programme (APP) from December 2017 to September 2018, however, the ECB reduced his monthly purchases by 50% from €60 billion to €30 billion. Mario Draghi said that the APP could potentially be extended in size and duration beyond September if needed. However, most analysts think that the stimulus will end in the third quarter of 2018. According to Reuters, the ECB plans to delay announcing any further reduction in the APP. Members of the Governing Council will likely be inclined to a normalization of monetary policy and rising interest rates after many years of unprecedented stimulus, according to analysts.
The British Pound remains vulnerable ahead of the EU summit on March 22 where an EU-UK trade deal should be concluded.
Technically, the EUR/GBP is testing the pivot point and the 200 SMA on the 15-minutes chart. A clear break down can open the door to S1 pivot point at 0.8910 and S2 pivot point at 0.8990. Resistance is seen at 0.8940-0.8950 area, with the 100 SMA and R1 pivot point. Further up, the next resistance is R2 pivot point/high of the day so far, at 0.8970.
EURGBP 15-minutes chart
