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EUR/GBP bulls committing at key 0.7110 level after NFP's

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 6, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
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    FXStreet (Guatemala) - EUR/GBP is currently trading at 0.7120 with a high of 0.7197 and a low of 0.7108.

    EUR/GBP has fallen away from the recent highs scored on the lead into the Nonfarm Payrolls numbers that came in greater than expected and propelled the greenback out of consolidation when it soared across the board on prospects that a Dec hike is on the cards.

    Average hourly earnings posted the biggest year-over-year gain since 2009 and increased 0.4% vs the estimated 0.2% and previous 0.0% m/m, up 2.5% over the prev year while the headline number for October printed at 271K, smashing the estimate of 180K while the prior number was revised to 137K from 142K. Meanwhile, despite a dovish BoE yesterday, Chief Analyst at Danske Bank Arne Rasmussen believes the cross could resume its downside in the medium term and said, “Fundamentally, we think that the market’s pricing of BoE is too dovish - even if the more negative outlook for CPI inflation indeed is a threat to our call for a bank rate increase in February 2016”.

    EUR/GBP levels

    Technically, the key day reversal has been tested back down through the 0.7145 level and 200 SMA on the hourly chart and penetrated the pivot of 0.7119 before running into support at the 0.7110 level. Further to the downside, 0.7057 May lows and the 0.7020 April 2006 high ahead of the psychological 0.7000 mark come as next downside targets.
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