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EUR/GBP garners demand on Boris's Brexit campaign

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 21, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    EUR/GBP opened with a heavy bid on a bullish gap in the Boris story which leads speculation towards a Brexit on the recently announced referendum date being the 23rd June 2016 on whether to stay in the EU.

    UK's Boris Johnson backs up Brexit, sends Pound sharply lower


    Boris Johnson, Mayor of London and Tory, is popular with the UK's public, (tipped to be prime minister one day) and his vote for a Brexit may well lead a majority of his supporters into the "out camp", and such sentiment is weighing heavily on the pound in the open of Asia today, already down -0.1% at time of writing vs the greenback, with a low at 1.4255 so far and down 0.31% vs the euro at time of writing, with a low of 0.7801.

    EZ data for the week ahead

    Meanwhile, for the week ahead in the EZ, there are Flash PMi's and HICP for Feb for Germany and France as the leading economies. "Advance inflation releases for Germany and France likely showed a sharp drop in inflation momentum, with German CPI dropping to 0.0% y/y and French CPI falling to 0.1% y/y. This is mainly driven by base effects, with pump prices suggesting an increase in Feb '16 energy prices in contrast with a decline in Feb '15 energy prices," explained analysts at TD Securities.

    EUR/GBP levels

    Technically, EUR/GBP has been confined to a range of 0.7695 lows on 16th Feb and 0.7844 the high on 17th Feb, capping the recovery of 0.7897 and 11th Feb downtrend.

    The pivot is located at 0.7761, above S1 at 0.7725 and S2 at 0.7700. The price has rallied through the 200 sma at 0.7728 on the hourly chart and cluster of ma's on the same time frame below centered around the 50 sma at 0.7763 while RSI remains in neutral at 46 on the hourly sticks.
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