FXStreet (Guatemala) – EUR/GBP is currently recovering back on to the 0.77 handle and is reattempting along the recently formed bullish trend from the support of the 100 sma on the hourly sticks at 0.7639 when the price rallied from 0.7620.
The recent highs capped that run initially, at 0.7755 and is next target if the cross can garner some demand through the 20 sma at 0.7713. It is likely in the event of further downside in cable, with the price already in a well-defined bearish trend. Sterling was sold off from above the 1.49 handle in December and has not looked back since.
The pound is under pressure with Brexit fears mounting, an unsustainable and ever increasing budget deficit with the chancellor’s plans for spending cuts that could simply mean mean borrowing down the line and the prospects of a housing crash, investors are exiting the UK and looking into US assets instead, supporting the cross.
The ECB is this week and will be the next catalyst for the euro. A dovish tone is expected, but depends how dovish the tone is. Valeria Bednarik, chief analyst at FXStreet said, “In one line, the ECB will likely refrain from adding more easing this week, but will leave doors open to do so in the future.”
You can watch the live coverage here.
EUR/GBP levels
Technically, Karen Jones, chief analyst at Commerzbank explained, yesterday’s price action was an outside day to the topside. She added that EUR/GBP has based and targets 0.8030/50. See here for more on that.
Meanwhile, RSI on the 4hr supports further upside at 58 heading higher with a near term target of R1 0.7772, R2 0.7792. This could be a tough area of resistance being the 2012 low was at 0.7762.
(Market News Provided by FXstreet)