27 Jul 2015
EUR/GBP: At crucial resiatnace; tracks a bid euro funding theme
FXStreet (Guatemala) - EUR/GBP is trading at 0.7127 currently with a high of 0.7161 and a low of 0.7067.
EUR/GBP is in a sideways channel on the short-term sticks today, consolidating the European advance from below the 0.71 handle up to challenge offers around the mid point of the handle. An extra push higher reached through 0.7160 before supply took the cross on to 0.7120 support in mid London of which we are now in a 20 pip range.
EUR/GBP consolidated on external fundamentals
Fundamentally, the euro is being used as a funding currency and hence it finds support in a solid plan from the ECB despite the uncertainty around Greece. Until China and commodities settle down or offer an alternative to potential havoc, investors will track the markets from a safer position which the euro offers in its phase of consolidation. The strength in the euro was also underpinned by the German IFO data while the greenback is sold-off, despit the durable goods orders beating expectations. There has not been anything from the UK today, but over the weekend, David Cameron, UK PM, has called for an EU referendum before the end of 2017 data for June 2016 instead. The market anticipates a stronger pound over the medium term on the back of the divergences between the central banks, with some economists seeking a rare hike from the BoE in 2016 while Carney has commenced a more hawkish rhetoric.
EUR/GBP technically with room on the bid still
EUR/GBP is technically in recovery of sell off that was to the base of a 6 year channel at 0.6967. The minor recovery has already breached the short-term downtrend from 0.7137 and further ahead, on a continuation of the recovery, there is scope for the 0.7221 July highs.
For the downside, a strong break and closes below the psychological 0.70 handle is required to bring in the base of the 0.6967 six-year down channel again and 0.6571/41 2007 lows. Also, for the downside, analysts at TD securities offered a technically bearish bias here.
EUR/GBP is in a sideways channel on the short-term sticks today, consolidating the European advance from below the 0.71 handle up to challenge offers around the mid point of the handle. An extra push higher reached through 0.7160 before supply took the cross on to 0.7120 support in mid London of which we are now in a 20 pip range.
EUR/GBP consolidated on external fundamentals
Fundamentally, the euro is being used as a funding currency and hence it finds support in a solid plan from the ECB despite the uncertainty around Greece. Until China and commodities settle down or offer an alternative to potential havoc, investors will track the markets from a safer position which the euro offers in its phase of consolidation. The strength in the euro was also underpinned by the German IFO data while the greenback is sold-off, despit the durable goods orders beating expectations. There has not been anything from the UK today, but over the weekend, David Cameron, UK PM, has called for an EU referendum before the end of 2017 data for June 2016 instead. The market anticipates a stronger pound over the medium term on the back of the divergences between the central banks, with some economists seeking a rare hike from the BoE in 2016 while Carney has commenced a more hawkish rhetoric.
EUR/GBP technically with room on the bid still
EUR/GBP is technically in recovery of sell off that was to the base of a 6 year channel at 0.6967. The minor recovery has already breached the short-term downtrend from 0.7137 and further ahead, on a continuation of the recovery, there is scope for the 0.7221 July highs.
For the downside, a strong break and closes below the psychological 0.70 handle is required to bring in the base of the 0.6967 six-year down channel again and 0.6571/41 2007 lows. Also, for the downside, analysts at TD securities offered a technically bearish bias here.