EUR/GBP turns positive as stocks drop

Discussion in 'Fundamental Analysis' started by FXStreet_Team, Feb 16, 2016.

  1. FXStreet_Team

    FXStreet_Team Well-Known Member Trader

    Oct 7, 2015
    Likes Received:
    The bid tone around EUR gathered pace, pushing the EUR/GBP higher to 0.74742 levels as the European equities dropped and German Zew survey figure printed higher than estimates.

    Trades above 10-DMA

    The cross now trades above its 10-DMA located at 0.7733 levels. Oil surrendered major part of its gains and pushed the European equities lower. Consequently, the funding currency EUR received a boost. Furthermore, German Zew survey – Economic Sentiment index printed higher than estimate and added to the bid tone around EUR.

    Stocks are back in the red and that increases the odds of a risk-off in the US. This would bring carry unwind back in play; which means the pair is at the mercy of the equity market sentiment.

    EUR/GBP Technical levels

    The immediate resistance is seen at 0.7772 (5-DMA), above which the cross could target 0.78 handle. On the other hand, a break below 0.7681 (23.6% of 0.6981-0.7897) could see the pair drop to 0.76 levels.
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