Trade of the Day: EURGBP To Test Symmetry Support
Trade of the Day: EUR closed lower at 1.1153 against the USD as traders believe the prospect of an interest rate hike in December is still on the table despite the jobs data not supporting a September hike. Traders await the European Central Bank meeting due this week. It is widely believed that ECB would keep policy unchanged but will probably respond to pressure for further easing by announcing an extension to its asset purchase program at the year end, according to a Reuters poll. GBP mirroring the better manufacturing PMI reading last week, UK’s construction PMI showed diminishing headwinds in August from Brexit fallout. Albeit remaining in contraction territory, construction PMI came in at 49.2 last month (July: 45.9) as Brexit shock tapered off. Separately, deflation prevailed in the euro zone as producers prices extended its streak of contractions (July: -2.8% YOY vs June: -3.1% YOY).
Trade Idea: I am monitoring price action in EURGBP anticipating a test of symmetry swing support at .8340 (as highlighted in the chart below) as this area supports, I will be watching for a daily reversal pattern to provide a base for a third drive higher to test the topside of the channel at .8550.