EUR/GBP headed to parity longer term?
|Currently, EUR/GBP is trading at 0.8658, down -0.30% on the day, having posted a daily high at 0.8739 and low at 0.8624.
EUR/GBP has reversed the recent spike onto the 0.87 handle that put the cross back into bullish territory within the longer term bullish trend. On the wide, some economists are looking at the 0.90 handle which reminds us that the cross was at 0.9229 highs not that long ago, relatively speaking back in the end of Sep 2016.
'Where the pound goes now depends, to a very large degree, on economic data," explained Kit Juckes, an economist at Societe Generale. "The political shock is surely mostly priced in. But the danger is that the economy slows even as the UK has a sticky inflation rate. We remain bullish of EUR/GBP over the medium term. The dangers to that trade, French politics and UK economic resilience, both seem smaller than the likelihood we have a serious look at parity between the pound and the euro in the years ahead."
EUR/GBP levels
Analysts at Commerzbank's near-term outlook for EUR/GBP is neutral to slightly positive: "The market continues to find near-term support circa the 55-day ma at 0.8603. Initial resistance lies at 0.8728 and .8771 (downtrends) and we suspect that this will cap for now. Above 0.8800, there is scope to tackle the 0.8852 January high. We look for the downside currently to be limited by the 200-day ma at 0.8571. Where are we wrong? Market is now bid above the 0.8581 200 day ma. Failure here will re-target the 0.8401 February low."
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