EUR/GBP: have the bulls got legs for the 50-D SMA?
|- EUR/GBP: bulls look for a break to the 50- D SMA, has it the legs?
- EUR/GBP: traders will be looking to the ECB meeting this week, what will it hold?
EUR/GBP has broken back to the upside on sterling weekends ahead of this week's ECB which might be a stumbling block for the cross in its recent advance. Currently, EUR/GBP is trading at 0.8762, down -0.14% on the day, having posted a daily high at 0.8777 and low at 0.8745.
ECB on the cards
Traders have been weighing up an ECB on hold until July to signal an end to QE while the BoE is now at a 50/50 and lower probability for a 10th May rate hike, (BOEWATCH) and that is supporting the bid on the cross.
ECB: what's the bottom line for this week's meeting? - ING
Looking at cable, it has plummeted since reaching the YTD highs and a significant pre-referendum level where traders have drawn a line in the sand. The pair has fallen to make a bearish reversal on the charts and further weakness below 1.37 would trigger a larger reversal and spike in the cross.
EUR/GBP levels
The 21-D SMA was broken last week as price made for the highest level in April so far, (0.8790). The 50-D SMA comes next. The bears would argue, however, that the broader outlook leaves the cross exposed to the downside below the weekly 10-SMA 0.8796 and 0.8800/0.8810 levels. "Above 0.8884 would allow for a recovery to the 0.8969 recent high and the .9034 October 2017 high," analysts at Commerzbank explained.
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