EUR/GBP 0.87000 next target
The British budget recorded the second-largest deficit recorded in April, the Office for National Statistics reported this morning. Net public sector borrowing rose to £ 31.7 billion in April. This was the second-highest lending in April since monthly bills began in 1993 and were £ 15.6 billion less than in April 2020.
In the financial year ended March 2021, net public sector borrowing was GBP 300.3 billion and remained the highest borrowing since the beginning of the FIE financial year in March 1946. Net public sector debt at the end of April was GBP 2,171.1 billion, or about 98.5 percent of GDP, the highest ratio of 99.5 percent recorded in March 1962. All this gives the European currency an advantage to make a certain profit with the pound.
European actions should remain supported given the significant improvement in vaccinations, the forthcoming fiscal support, and the significant discount compared to the US for a market that offers access to both cyclical recovery and protection against inflation. In the first quarter, much of the disappointment around Europe focused on the slow start of the vaccination process. In April, this changed rapidly, with the pace of daily vaccinations doubling as bureaucratic procurement and distribution issues were ironed out, which could positively impact the rapid opening of the economy.
We see that the EUR/GBP pair finds support at 0.86000 at 78.6% Fibonacci level on the daily time frame. After that, we climb to higher levels, to climb to 61.8% Fibonacci levels at 0.87450. From the support in moving averages, we find it in MA20, EMA20, and MA50, and based on their support, we can expect to approach both MA200 and EMA200 in the range between 0.87400-0.88000. Looking at the MACD indicator, we find at the beginning of the bullish signal, and based on it, we can expect an increase in the value of the euro against the pound.
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