EUR/GBP: bearish bias persists targets July lows

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 12, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    FXStreet (Guatemala) - EUR/GBP is currently trading at 0.7080 with a high of 0.7102 and low of 0.7040.

    EUR/GBP has been testing the 0.7080 supporting zone while bets still remain with a BoE hike in the first 2Q's of 2016 and the divergence between the ECB and BOE prevails.

    Analysts at Brown Brothers Harriman explained to recall that in the BOE's recent Quarterly Inflation Report is anticipated slower rate growth in Q4 to 2.5% from 3.0% in August, though it kept the Q4 2016 estimate unchanged at 3.75%.
    "Looking at short-term UK interest rates and sterling's performance, it seems clear the data is not a game changer and views of the BOE's trajectory have not changed."

    EUR/GBP levels

    Technically, Karen jones, chief analyst at FXStreet explained that EUR/GBP remains on the defensive, the market failed ahead of the 0.7210/45 corrective band and our attention has reverted to the 0.7025 4 month support line. Initial resistance lies at 0.7196/98, the recent high, and major resistance continues to be seen at 0.7502 (this is the location of the 2013-2015 downtrend). We will maintain our bearish view while capped here. Below the 0.7000 level lies the 0.6937 July low and the 38.2% retracement of the move from 1971 at 0.6915. This remains the next major break down point."
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