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EUR/GBP: downside testing critical support

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 13, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Guatemala) - EUR/GBP is currently trading at 0.7052 with a high of 0.7107 and a low of 0.7041.

    EUR/GBP support has resolved the pressures from the supply at the 0.71 handle, falling in at aforementioned lows, significantly the lowest levels since late August. November is a slower month for sterling that has been on the rebound since mid October highs of 0.7492. Markets are backing the sentiment for a BoE rate hike again for the first quarter of 2016 and in anticipation of further easing from the ECB. "For the MPC, the achievement of the inflation target will be most determined by real wage growth and on that the outlook is bright. We continue to expect EUR/GBP to drift lower from here," explained Derek Halpenny, analyst at Bank of Tokyo Mitsubishi.

    EUR/GBP levels

    Karen Jones, chief analyst at Commerzbank 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 .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 .7000 level lies the .6937 July low and the 38.2% retracement of the move from 1971 at .6915. This remains the next major break down point."
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