During a trading session marked by notable volatility, the EUR/GBP exchange rate currently hovers in the vicinity of ZAR 15.84. The cross pair experienced a weekly low drop to ZAR 15.75 but later bounced back towards ZAR 15.82, before settling around the present exchange rates. At the time of writing, the EUR/GBP is being traded at around ZAR 15.84, reflecting a slight gain of 0.06%.
EUR/GBP Price Analysis: Technical Perspective
The EUR/GBP exchange rate exhibits a neutral to downward bias, as the rate remains below the daily Exponential Moving Averages (EMAs). After falling below the 20-day EMA, the EUR/GBP intensified its decline, testing the year-to-date (YTD) low of ZAR 15.75. However, the EUR/GBP later stabilised in the region of ZAR 15.84. Interestingly, the EUR/GBP’s daily chart illustrates a double bottom pattern, a bullish sign in technical analysis. However, this pattern will require a daily close above the July 5 open of ZAR 15.82 to clear the path for further upward movement. Additionally, the price action of the last two days potentially forms a bullish engulfing candle pattern.
In the event of such a bullish turn, the EUR/GBP’s first resistance level would be the 20-day EMA at ZAR 15.86. Should this level be breached, the psychological level of ZAR 15.90 will be exposed, followed by the 50-day EMA at ZAR 15.94. Eventually, this upward momentum may lead to testing the June 28 daily high of ZAR 16.00.
On the other hand, if the EUR/GBP were to extend its losses and break past the current year-to-date (YTD) low of ZAR 15.74, the figure of ZAR 15.70 would be up for a test.
For South Africa, changes in the EUR/GBP exchange rate hold significant implications. Given the country’s economic and trading ties with both the Eurozone and the United Kingdom, fluctuations in this rate could impact South Africa’s international trade, the value of the South African rand, and more broadly, the nation’s overall economic health. Hence, it is essential for stakeholders in South Africa to stay informed about developments in this pair.
*All currencies in the article have been converted to the South African Rand