FXStreet (Guatemala) – EUR/GBP is currently trading at 0.7118 with a high of 0.7148 and a low of 0.7100.
EUR/GBP is up from the 0.71 handle on a minor recovery of the slide of the mid point of the handle. The long and short of it is that there is still no Greek deal and negotiations are dragging on. Markets are losing faith of positive conclusions and the euro is subject to sentiment around the possible outcomes. Sterling has been buoyed by chatter of the prospects of a rate hike and remains supported since the recent election of the conservative party.
However, this in itself could lead to a longer term requirement of tighter fiscal policy in the UK and subsequent institutional risks may start to weigh on economic growth and result in more accommodative monetary policy going forward, so caution is required on long positions in the pound for the medium term. However, the US dollar is tipped to continue higher vs the euro and parity could aid being in a short EUR/GBP position in to 2016 on the basis of divergences between the central banks and the ECB’s QE programme continuing.
EUR/GBP remains bearish below key resistances
Technically, EUR/USD is basing around the 1.12 handle in a wide channel with 1.1150 acting as support and 1.1230 as resistance. Cable is trying to hold on to the 1.57 handle but the greenback is attracting safe haven flows and leaves the cross heavy below 0.7140 and 0.7247 (16th June highs). 0.7055 is the 27th May lows that are on the bears map.
(Market News Provided by FXstreet)