FXStreet (Guatemala) – EUR/GBP is currently trading at 0.7177 with a high of 0.7185 and a low of 0.7154.
EUR/GBP has managed a bid on the European and US markets with demand coming in at the mid point of the 0.71 handle up to 0.7180 resistance. The main theme today was of course with Greece again, even while markets are tired of the same beat of the same drum. The IMF have proposed that 30th June is THE deadline and that there will be no allowance period to extend that deadline. There is sentiment for a Grexit.
Sterling has been less of a performer in today’s sessions, with the rally on to the 1.59 handle topping out at 1.5929 and tucking back below the figure in to the US session with a tired rally of yesterday’s strong performances on ideas that the BoE could be lining up for a change of tone in respect to its interest rate outlook with two members on the fence, despite the 9-0 vote while BoE’s Forbes was suggesting that a rate hike could come before the 2% inflation target.
EUR/GBP bulls resilient
Meanwhile, technically, the cross remains bearish below the psychological 0.72 handle that was taken out yesterday, bringing in the the June lows and towards the 0.7127/23 (Fibo + 22nd April low) on further downside pressures. However, for now, the bulls are taking back some control and remain resilient ahead of the key and aforementioned supporting levels.
Greek default fears will weigh on EUR/GBP
Meanwhile Jane Foley, Senior Currency Strategist at Rabobank, holds a bearish view for the cross based up on interest rate differentials between the US and UK and Greek default fears. “Cable’s recent gains have not been in tune with our view that the currency pair will soften into the second half of this year. This view is built on the assumption that the Fed will hike rates in December, well ahead of the BoE and that austerity and EU membership uncertainty could weigh on the pound. We still adhere to this view. While Greek default fear will likely keep cable well supported near-term, we would expect 1.60 to offer strong psychological resistance. We maintain our view that EUR/GBP will push towards 0.70 on a 6 mth view”.
(Market News Provided by FXstreet)