EUR/GBP: bears cap advance through the 0.90 handle, but still better bid?

EUR/GBP: bid as market focusses on US economy, improving EZ sentiment and deadlock Brexit negotiations.\
EUR/GBP: headed back to the 12th Oct highs?

Ross J Burland FXStreet

EUR/GBP: Currently, EUR/GBP is trading at 0.8969, up 0.10% on the day, having posted a daily high at 0.9016 and low at 0.8954. EURUSD is firmer but marginally off the overnight peak in the mid-1.18s and has now recouped all the ground lost in late Oct following the ECB’s tapering decision. This has left the cross chasing the bid also, against a backdrop where the markets are focussing on the US economy while the German economy is proving to be strong, pulling in the yield differentials that are aiding the euro's rise currently.

Sterling can't shake off the Brexit pessisim

For sterling, it is the laggard of the two while expectations of a further BoE hike have been squashed by a run of disappointing data. Today there was a disappointing 14k drop in Sep employment, (the first drop since last Oct). However, wage data showed average weekly earnings up 2.2%, a little better than expected while the unemployment rate remained unchanged at 4.3%. However, the political environment in respect of the shaking foundations that PM May is trying to negotiate Brexit from is a major concern for Sterling bulls while talks between the EU and the UK over the terms and timing of the “divorce” appear to almost stationary, dragging on positive sentiment and offsetting anything remotely positive from the UK's economic performance. Thus, EUR/GBP is better bid.

EUR/GBP levels

Analysts at Commerzbank noted that EUR/GBP has eroded the short term downtrend and the 55 day ma and in doing so we should see further strength to the 0.9034 12th October 2017 high, where they suspect that it will struggle. "Above here would target 0.9093 then 0.9187. Dips lower should find initial support 0.8790 ahead of major support band, namely the 200 day ma at 0.8771, the September low at 0.8746 and the 55 week ma at 0.8720," analysts at Commerzbank added.

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

GBP/USD dips below 1.3350 with bullish momentum losing steam

The British Pound ticks lower against the US Dollar Monday, attempting to close a seven-day rally, as tensions rise again in the Strait of Hormuz, one of the critical points in the peace process between Washington and Tehran. The GBP/USD pair trades near 1.3340 at the time of writing, down from 1.3387 highs last week, although it maintains a near-term bullish trend intact.

EUR/USD clings to daily gains, still below 1.1450

EUR/USD manages to shrug off the initial bearish tone and advances toward the 1.1440-1.1450 band on Monday, up modestly for the day. Meanwhile, the pair’s mild gains comes on the back of the lack of clear direction in the Greenback in quite an apathetic start to the week.

Gold remains offered below $4,200

Gold comes under fresh downside pressure on Monday, reversing three daily upticks in a row and meeting some initial resistance around the $4,200 mark per troy ounce. Safe-haven demand has shifted toward the US Dollar as renewed tensions surrounding the Strait of Hormuz weigh on market sentiment, limiting the precious metal's upside.

Crypto Today: Bitcoin, Ethereum, XRP pull back amid persistent ETF outflows

The cryptocurrency market is experiencing widespread weakness on Monday, with Bitcoin (BTC) sliding under the $63,000 mark amid ongoing risk aversion.

The US Dollar just beat the Swiss Franc at its own safe-haven game

As the king among safe havens, the Swiss Franc is supposed to benefit from geopolitical shocks such as the Iran war. This time, it didn’t. The Swissie is nearly 6% below January’s peak against the USD after a sharp decline that came along with the war in Iran and the closure of the Strait of Hormuz.

Kevin Warsh offers no policy clues: Why markets still got their answer

Financial markets came to Sintra looking for clues about the Federal Reserve's (Fed) next move. They largely left with confirmation that Fed Chair Kevin Warsh intends to make those clues much harder to find.