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18 Sep 2013
EUR/GBP well below 0.8400 handle ahead of MPC
FXstreet.com (Athens)- The EUR/GBP is under heavy pressure ahead of MPC minutes.
EUR/GBP puzzled ahead of MPC minutes, Italian political uncertainty
The EUR/GBP is trading downwards despite the fact that it is widely accepted that the sterling is
Already in deep overbought territory. The release of the MPC minutes will
be in focus in the European trading session, as the Euro land calendar is everything but heavy today. The majority of traders do expect and have already priced in to a less or more extent, that most BoE members are likely to have judged that the increase in market rates has been greater than warranted, by the improvement in the economic data although also acknowledging the further improvement in economic growth in the third quarter. However, while the vast majority of investors expect that the minutes will reveal that the MPC were unanimous in their decision not to implement further QE, risks to the pound might likely skewed to the downside from both the MPC minutes and sterling already being in overbought territory.
Technical Outllook on EUR/GBP
Karen Jones, Head Technical Analyst at Commerzbank suggests that the EUR/GBP “is under pressure, but should find some support circa 0.8350. Also, EUR/GBP again sold off sharply, which has somewhat negated our fears over a rebound. The market has started to erode its 55 week ma at .8374 and despite the TD perfected set up and 13 count clearly remains vulnerable on the downside. The intraday charts indicate that this move should terminate circa .8350. Any rebounds will find initial resistance offered by the June low at .8470, the 200 day ma at .8497 and stronger resistance at .8515, the 38.2% Fibonacci retracement of the recent decline. Longer term the market has reversed from the top of a 4 year channel and longer term downside targets .8280/.8155/.7980 have been introduced (Fibonacci retracements of the move up from 2012)
EUR/GBP puzzled ahead of MPC minutes, Italian political uncertainty
The EUR/GBP is trading downwards despite the fact that it is widely accepted that the sterling is
Already in deep overbought territory. The release of the MPC minutes will
be in focus in the European trading session, as the Euro land calendar is everything but heavy today. The majority of traders do expect and have already priced in to a less or more extent, that most BoE members are likely to have judged that the increase in market rates has been greater than warranted, by the improvement in the economic data although also acknowledging the further improvement in economic growth in the third quarter. However, while the vast majority of investors expect that the minutes will reveal that the MPC were unanimous in their decision not to implement further QE, risks to the pound might likely skewed to the downside from both the MPC minutes and sterling already being in overbought territory.
Technical Outllook on EUR/GBP
Karen Jones, Head Technical Analyst at Commerzbank suggests that the EUR/GBP “is under pressure, but should find some support circa 0.8350. Also, EUR/GBP again sold off sharply, which has somewhat negated our fears over a rebound. The market has started to erode its 55 week ma at .8374 and despite the TD perfected set up and 13 count clearly remains vulnerable on the downside. The intraday charts indicate that this move should terminate circa .8350. Any rebounds will find initial resistance offered by the June low at .8470, the 200 day ma at .8497 and stronger resistance at .8515, the 38.2% Fibonacci retracement of the recent decline. Longer term the market has reversed from the top of a 4 year channel and longer term downside targets .8280/.8155/.7980 have been introduced (Fibonacci retracements of the move up from 2012)