EUR/GBP: The ECB meeting will be held June 1-2 _31/05/2016

Trading recommendations

Buy Stop 0.7680. Stop-Loss 0.7630. Take-Profit 0.7770, 0.7820

Sell ​​Stop 0.7610. Stop-Loss 0.7650. Take-Profit 0.7570, 0.7500, 0.7450, 0.7350


Technical analysis

Pair EUR/GBP is a global downward trend that began in 2009. The pair EUR / GBP was unable to develop upward correction above 0.8100 level (just above the 61.8% Fibonacci level at 0.8020).

When reached in April yearly highs near the mark of 0.8100 EUR / GBP pair is actively reduced, reaching the key support level of 0.7610 (EMA50 on the weekly chart, EMA200 on the daily chart and Fibonacci correction level of 38.2% to the last wave decline from the highs in August 2013, and the mark 0.8700).

Within two months of incomplete pair lost almost 6.5%, down 500 basis points to the current level.

In mid-May the price breaks the level of 0.7820 (Fibonacci level of 50%) and has developed a downward trend. Currently the pair has stabilized at the level of 0.7610 support, however, remained under pressure.

OsMA and Stochastic indicators on the daily and 4-hour charts are deployed on long shopping, however, at the weekly and monthly charts lamp we recommend selling.

The breakdown level 0.7570 (May lows) will open the way to further reduce pair EUR / GBP in the descending channel on the daily chart the levels of 0.7450, 0.7350 (23.6% Fibonacci level).

Height above the level of 0.7675 will cancel this scenario and return the pair to the resistance level 0.7770 (the upper line of the descending channel on the daily chart), 0.7820 (Fibonacci level 50%).

Support levels: 0.7610, 0.7570

Resistance levels: 0.7675, 0.7750, 0.7770, 0.7820


Overview and Dynamics

According to the latest poll of the sociological service ORB for the newspaper The Daily Telegraph, the number of Britons who want to remain part of the EU, accounting for 51% of the country's exit from the EU would vote is now around 46% of the UK population. Politics British Prime Minister David Cameron, lobbied for it to remain in the United Kingdom European Union, a number of advantages, of which he was able to achieve for the UK in Brussels, as well as the active promotion by the forces working for European integration, are bearing fruit.

Back in late April, the Organization for Economic Cooperation and Development (OECD) stated that in case of EU the UK economy in 2020 would be 3% less than it would be in the case if the country remains in the EU. The head of the Bank of England Governor Mark Carney said that if the UK population will vote for the country's withdrawal from the EU, the pound may lose 20% of its value.

Second consecutive month EUR / GBP pair is reduced. Previous 4-month growth was accompanied by growth of pair euro amid falling European stock markets and the euro as a currency repurchase funding, as well as the weakness of the pound under pressure from the UK exit from EU risk composition. The number of supporters of EU output has increased at the time after a series of terrorist attacks in Belgium in March this year.

The pound remains strong after a series of positive data, including retail sales for April, and the publication of poll results, according to which more than 50% of the UK population against the exit of the country from the EU structure, while the euro dropping in value of the foreign exchange market amid rising European and world indices and the strengthening of the US dollar.

The meeting of the European Central Bank's Governing Council will be held in Vienna on 1-2 June. On Thursday (11:45 GMT) will be published on the ECB's decision on interest rates. The ECB is unlikely to take any action at this meeting to stimulate inflation and the euro area economy. In a subsequent press conference, ECB President M.Dragi made comments on the current situation and give forecasts for economic growth and inflation in the euro area.

In anticipation of the meeting of the ECB euro will remain weak, including in cross-pair EUR / GBP.