Jump to content

EUR/GBP Hovers Above 0.85 as Buyers Look for Support


Recommended Posts

KEY TALKING POINTS:

  • EUR/GBP finds renewed support at 0.85
  • GBP to remain sensitive to domestic data on the back of policy tightening expectations.

EUR/GBP Price Forecast - Range Support Broken, Fresh Multi-Month Lows Now  on The Cards

EUR/GBP is edging higher this morning after finding renewed support at 0.85. Wednesday’s candlestick offers the potential for a bullish reversal after a week of declines following the bullish breakout last week. The moves have been fully reversed and the pair is at risk of falling back within a tight range before the next move happens. The test will be whether EUR/GBP can claim a daily close above 0.8525, Wednesday’s high, and a key area of confluence in recent weeks. If so, momentum could pick up towards 0.8550 over the coming days, whilst a pullback before today’s close is a pretty bearish signal going forward.

EUR/GBP Daily chart

EUR/GBP Hovers Above 0.85 as Buyers Look for Support

 

GBP has been bouncing higher after a strong pullback last week as money markets are excessively pricing in a hawkish BOE by year end. The drop in the currency meant that adding GBP shorts was less attractive and so the bounce higher was expected. But the outlook for the British currency remains pretty weak as positioning continues to be playing to GBP’s detriment, which is likely going to be more sensitive to domestic data going forward, meaning it will have a greater impact on EUR/GBP given market expectations about monetary policy.

On the Euro side, the ECB has begun to explore a new bond-buying program when the pandemic program ends in March as to keep in line with its ultra-flexible financing conditions. The impact on EUR is very limited as this move is highly expected, with volatility more likely if the ECB surprises on the hawkish side. But the Euro is likely to remain sensitive to the surge in energy prices, more so that the Pound, which could keep gains capped for EUR/GBP in the short term.

The outlook for the pair is dependent on how the factors mentioned above play out. Some good data out of the UK and an increased likelihood of the BOE raising rates by Feb 2021 would be supportive for the Pound and could see EUR/GBP move towards yearly lows at 0.8450, whilst a stronger euro, or a weaker Pound as hawkish bets fold, could see EUR/GBP jumping towards 0.87.

Written by Daniela Sabin Hathorn, Market Analyst, 7th October 2021. DailyFX

Link to comment

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
  • General Statistics

    • Total Topics
      19,524
    • Total Posts
      86,911
    • Total Members
      68,777
    • Most Online
      7,522
      10/06/21 10:53

    Newest Member
    darcy5454
    Joined 12/08/22 12:10
  • Posts

    • KLA Corp., Elliott Wave Technical Analysis KLA Corp.,(KLAC:NASDAQ): Daily Chart, August 12, 2022,  KLACStock Market Analysis:Looking for further continuation lower into wave c) of {ii}. Wave (b) may not be finished, however I am still looking for further downside after the initial move up we had in a five wave manner. KLAC Elliott Wave count:  Wave c) of {ii}. KLACTrading Strategy: wait for the end of wave {ii} to start building long positions to target ATH. KLAC Technical Indicators:We are above all EMAs which suggests we have resumed the uptrend. We could find support off the 200 EMA. TradingLounge Analyst: Alessio Barretta       KLACorp.,KLAC: 4-hour Chart, August 12 2022,  KLA Corp., Elliott Wave Technical Analysis KLAC Stock Market Analysis: Looking for completion of wave (b) to then resume downside into wave c) which could eveb be traded on short timeframes. KLACElliott Wave count:  Wave c of (b). KLAC Technical Indicators: We are facing resistance off the 20 EMA which could be a sign wave (b) is completed or nearly completed. KLACTrading Strategy: You could either look for shorts into wave c) or/and wait for a larger swing once wave {ii} is finished and target he upside with wave {iii}.
    • Elliott Wave Analysis TradingLounge 3-Daily Chart, 12 August 2022, Monero(XMRUSD) XMRUSD Elliott Wave Technical Analysis Mode: Motive Structure: Impulse Position: Wave I Direction Next higher Degrees: Wave C of Zigzag Details: The sub-wave of the first wave is about to end. Watch out for the reverse in Wave Cancel invalid Level: Monero(XMRUSD) Trading Strategy: The entry price is entering the last wave of the first wave. And it is going up to test resistance at MA50, waiting for a reversal in the second wave to enter the trend again. Monero(XMRUSD) Indicators: MACD and MACD Histogram have a reversal signal in an uptrend. TradingLounge Analyst: Kittiampon Somboonsod Elliott Wave Analysis TradingLounge 4H Chart, 12 August 2022, Monero(XMRUSD) XMRUSD Elliott Wave Technical Analysis Mode: Motive Structure: Impulse Position: Wave ((4)) Direction Next higher Degrees: wave I of C Details: Entering the fifth wave. Watch out for the reverse Wave Cancel invalid Level: Monero(XMRUSD) Trading Strategy: The short-term rise of the fifth wave After the fourth wave The level of the end of the triangle pattern is at The end of wave D, but if the price descends below the end of wave E, it is possible that the fifth wave may end at wave B. Monero(XMRUSD) Technical Indicators: MACD and MACD Histogram continue in the same direction.
    • Hi @ArturG, I added a response on the thread you shared. Effectively, the rule apply to UK clients. You can find the relevant text here:https://www.legislation.gov.uk/eur/2014/1286/body I hope that it helps ! All the best - Arvin
×
×
  • Create New...