EUR/GBP weakens ahead of BoE speakers. WTI crude oil trades near session highs ahead of EIA data.

EUR/GBP weakens ahead of BoE speakers

Pound continues to cheer road map out of lockdown and the prospect of the economy reopening fully by H2 (FXB).

UK unemployment hit 5 year high 5.1% but claimant count unexpectedly dropped by 20k which could be an early sign of stabilization in the labour market

BoE will present its monetary policy report to the UK Treasury Committee

German GDP Q4 upwardly revised to 0.3% QoQ vs 0.1% previously.

Where next for EUR/GBP

GBP/EUR crossed below its 200 sma in early January and has been trending southwards since. 

The 50 sma crossed below the 200 sma in a bearish signal. Although oversold conditions on the daily RSI suggest that a corrective pullback could be on the cards. 

The price has edged below an ascending trend line dating back to October 2016 at 0.8570 a clear and meaning full break below this level is required for the bears to extend the selloff to 0.8390 (Jan ’20 low) before 0.8280 the 2020 lows.

Despite trending lower for for9 straight sessions pair has potential for further downside (FXE).  

Immediate resistance can be seen at 0.8590. A close above 0.8850 is needed for any recovery to be considered strong and for the bulls to gain momentum.

WTI trades near session highs ahead of EIA data

WTI pulls back from multi month high on downbeat API inventory data.

Stocks grew 1.2 million barrels after previous draw of 5.8 million.

Weaker US Dollar offers support amid cautious optimism surrounding recovery.

Production in Texas is yet to recover and US – Iran tussle keeps a bullish optimism alive.

EIA report due later will be eyed for fresh impetus, with a stockpile draw of -5.7 million barrels.

Where next for WTI crude oil?

After hitting 63.00 a fresh yearly high and a level last seen pre-pandemic on Tuesday, WTI rebounded lower falling through 62.00 and even briefly below 61.00. 
WTI has since regained some composure pushing towards mid 61.00’s.

Even so WTI remains within the ascending channel dating back to late January. Whilst the lower band holds around 61.00, WTI could make a renewed attempt on 63.00 before the bulls eye 2020 high of 6570. 

Should the lower band of the ascending channel be meaningfully broken through at 61.00 and the 50 sma on the4 hour chart at 60.30 then the bears could look to target 58.60. A break through this level could see the sell off gain traction.