EURGBP TECHS: Trading Above Its Recent Lows
- RES 4: 0.8769 High Jul 28
- RES 3: 0.8744 High Aug 7
- RES 2: 0.8682 High Aug 8
- RES 1: 0.8667 High Aug 20
- PRICE: 0.8656 @ 16:38 BST Aug 21
- SUP 1: 0.8597 Low Aug 14
- SUP 2: 0.8562 50.0% retracement May 29 - Jul 28 upleg
- SUP 3: 0.8540 Low Jun 30
- SUP 4: 0.8514 61.8% retracement May 29 - Jul 28 upleg
EURGBP is trading above its recent lows. A stronger recovery would refocus attention on key resistance and the bull trigger at 0.8769, the Jul 28 high. Note that recent weakness resulted in a breach of key support at 0.8611, the Jul 31 low. The cross has also pierced the 50-day EMA, at 0.8618. A clear breach of these supports would instead highlight a stronger reversal. This would open 0.8562, a Fibonacci retracement point.
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EURGBP TECHS: Trend Structure Remains Bullish
- RES 4: 0.8800 Round number resistance
- RES 3: 0.8781 2.236 pro of the Mar 3 - 11 - 28 price swing
- RES 2: 0.8738 High Apr 11 high and a key resistance
- RES 1: 0.8698 High Jul 16
- PRICE: 0.8681 @ 15:47 BST Jul 22
- SUP 1: 0.8638 Low Jul 21
- SUP 2: 0.8620 20- day EMA
- SUP 3: 0.8556 50-day EMA
- SUP 4: 0.8508 Low Jun 27
The trend condition in EURGBP is unchanged, it remains bullish and the cross is holding on to its recent gains. Fresh cycle highs last week maintain the price sequence of higher highs and higher lows and note too that moving average studies are in a bull-mode position, highlighting a dominant uptrend. A resumption of gains would open key resistance at 0.8738, the Apr 11 high. Support to watch is 0.8620, the 20-day EMA.
US: FED Reverse Repo Operation
RRP usage retreats to $196.374B this afternoon from $213.666B yesterday, total number of counterparties at 34. Usage had fallen to $54.772B on Wednesday, April 16 -- lowest level since April 2021 - compares to July 1: $460.731B highest usage since December 31.
US: Consumer Sentiment Increases Amongst High Earners
New data from Morning Consult shows that consumer sentiment is increasing amongst high earners, but stagnating at lower levels. The discrepancy is likely due to lower stock market participation and lower homeownership amongst lower income groups.
- Axios notes: “The difference in sentiment between the top and bottom income groups is the widest since Morning Consult began tracking the data in 2018.
- Axios: “The S&P 500 has bounced back — and then some — from its April "Liberation Day" lows. A rising 401(k) drives spirits higher. But the vast majority of low-income adults don't have money invested in stocks.
- “Higher house prices make homeowners feel great [but] That does nothing for renters, except make them feel locked out of the American dream…. While overall unemployment still seems low, lower-earning adults are increasingly reporting a loss of pay or income in Morning Consult data, says chief economist John Leer.”
Figure 1: Consumer Sentiment Index, by Income Group
Source: Axios, Morning Consult
