EURGBP, Daily

Cable has rallied to a fresh six-month high at 1.2917, finally breaching the high seen last Tuesday after British PM May called a snap election. The pound is presently showing an average 0.3% gain versus the G3 currencies on the day, and a 1.5% gain versus these currencies on a week-on-week basis. News that the Conservative Party showed a lead of 23 percentage points in a Ipsos MORI poll boosted the pound as it showed that the party of British PM May is set to greatly increase its majority at the June-8 election. This would, so the thinking goes, increase her flexibility when it comes to Brexit negotiations by diluting the influence of hardline Brexit MPs. This, and the fact that another election won’t be due until three years after actual Brexit in 2019, is seen by some as raising the odds for a “smoothing” transitional deal until a new trading agreement is in place (as this is likely to take longer than two years). However, there are reports that May will pledge a “triple lock” on immigration, free movement, and the European Court of Justice as a central pillar of here election manifesto, which suggests a “hard” Brexit.

Even if Hard Brexit remains very much on the cards, pound consider be one of the strongest currencies of the day since markets focused today in the ECB data and on the press conference. ECB left rates, QE unchanged, maintains easing bias – as expected. The central bank left benchmark rates unchanged at today’s council meeting and confirmed the QE schedule, to run at EUR 60 bln per month for the rest of the year.

During ECB Meeting ,  Mario Draghi acknowledge the improved growth outlook saying downside risks have diminished further, but at the same time he stressed that the very substantial degree of monetary accommodation is still needed and that the ECB needs to see through transient inflation developments. Additionally, he shrugged off the idea that the second round of the French presidential election would have an impact on the central bank’s assessment of the growth outlook, but admitted that there was a discussion on whether the balance of risks isn’t more balanced now. However, in the end it seems the hawks gave in and supported the official statement, maybe also because as we suspect the doves hinted that the forward guidance will be finally be tweaked in June.

EURGBP

EURGBP

Hence, ECB meeting seems that it did not have much of an impact on EURGBP, since pair lift it only up to today’s high at 0.8473.  Therefore, EURGBP continues its downtrend since yesterday and therefore by 4 consecutive 4-hour down candles, it prompted SHORT position. Entry was taken at 0.8445, while resistance was set 20-Day EMA, at 0.8480, which is also the confluence of 23.6 Fibonacci level in 4-hour chart. In the 4-hour chart the pair manage to break earlier  the 50-period EMA, and the lower Bollinger Bands pattern. RSI is at 43, sloping further down,  suggesting further weakness for the week. Hence based on ATR indicator, Target 1  was set at 0.84100, while by using 61.8 Fibonacci level, Target 2 was set at 0.8400

Disclaimer: Nothing in this communication contains, or should be considered as containing, an investment advice or an investment recommendation or a solicitation for the purpose of purchase or sale of any financial instrument.

Recommended Content


Recommended Content

Editors’ Picks

AUD/USD recovers above 0.6750 after Australian jobs data

AUD/USD recovers above 0.6750 after Australian jobs data

AUD/USD picks up a late bid and recovers above 0.6750 in Asian trading on Thursday, following the release of mixed Australian employment data. The extended post-Fed US Dollar recovery, amid a cautious market mood, could limit the pair's upside ahead of US data. 

AUD/USD News
USD.JPY jumps toward 144.00 on the road to recovery

USD.JPY jumps toward 144.00 on the road to recovery

USD/JPY gains traction and approaches 144.00 in Thursday's Asian session. The uptick of the pair is bolstered by the impressive US Dollar recovery. Investors shift their attention to the US data and the Bank of Japan interest rate decision on Friday. 

USD/JPY News
Gold price remains on the defensive amid the post-FOMC USD recovery from YTD low

Gold price remains on the defensive amid the post-FOMC USD recovery from YTD low

Gold price struggles to lure buyers despite the Fed’s jumbo interest rate cut on Wednesday. A further recovery in the US bond yields underpins the USD and caps the non-yielding metal. Concerns about an economic slowdown, along with geopolitical risks, help limit the downside.

Gold News
Ethereum attempts recovery following first rate cut in four years

Ethereum attempts recovery following first rate cut in four years

Ethereum is trading above $2,330 on Wednesday as the market is recovering following the Federal Reserve's decision to cut interest rates by 50 basis points. Meanwhile, Ethereum exchange-traded funds recorded $15.1 million in outflows.

Read more
Australian Unemployment Rate expected to hold steady at 4.2% in August

Australian Unemployment Rate expected to hold steady at 4.2% in August

The Australian Bureau of Statistics will release the monthly employment report at 1:30 GMT on Thursday. The country is expected to have added 25K new positions in August, while the Unemployment Rate is foreseen to remain steady at 4.2%.

Read more
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

Majors

Cryptocurrencies

Signatures