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EUR/GBP hits fresh session lows after US data

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Nov 4, 2015.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

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    FXStreet (Mumbai) - The EUR/GBP pair hit a fresh session low of 0.7070 as the British Pound remained relatively resilient to the broad based USD rally.

    Monetary policy divergence at play

    The increasing expectation of a Fed rate hike in December is weighing heavily over the EUR since the EC Bhs hinted at more easing in December. Meanwhile, the Sterling stays relatively resilient as the BOE is expected to follow the Fed and raise rates.

    Moreover, the markets now believe the Fed has made up its mind and thus even a slightly better than expected US data is leading to broad based USD rally and a serious EUR weakness. The EUR/GBP cross is now approaching 0.7063 (76.4% of Jul-Oct rally).

    EUR/GBP Technical Levels

    The immediate support is seen at 0.7063 (76.4% of Jul-Oct rally), under which the pair could extend the losses to 0.7026 (Aug 18 low). On the other side, resistance is seen at 0.71 and 0.7145 (61.8% of July to Oct rally).
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