EUR/GBP trades flat around 0.8450, eyes BoE, Brexit

EUR/GBP keeps the tight range in the mid-0.8400s.
Speculations on a BoE rate cut remain on the rise.
The European Parliament will vote later today on the WA.

Pablo Piovano FXStreet

The softer tone in both the quid and the single currency keeps EUR/GBP within a narrow range near 0.8450 on Wednesday.

EUR/GBP now looks to BoE, Brexit

The European cross has faded the initial spike to the daily highs around 0.8465, where sits the 10-day SMA, and it has returned to the familiar range in the mid-0.8400s.

In the meantime, the sterling remains under pressure against the backdrop of rising rumours that the ‘Old Lady’ could reduce the policy rate at Thursday’s event despite some positive results from the UK docket as of late.

Back to Brexit galaxy, the European Parliament will vote later in the afternoon on the withdrawal agreement before the UK leaves the European Union on Friday.

Earlier in the session, German Consumer Climate improved to 9.9 for the month of February according to GfK. On the other side of the Channel, house prices gauges by the Nationwide index rose 0.5% inter-month in January and 1.9% from a year earlier, btoh prints coming in above estimates.

What to look for around GBP

The British pound has come under renewed downside pressure in past sessions on the back of the USD-rally and renewed concerns on the Brexit front. In the meantime, investors’ attention remains on the upcoming Brexit deadline (January 31^st) and the subsequent key trade negotiations with the European Union, which will surely bring in volatility and effervescence to the cross. In addition, rising speculations of a probable rate cut by the BoE as soon as on Thursday keep GBP-bulls at bay for the time being.

EUR/GBP key levels

The cross is losing 0.04% at 0.8454 and a breakdown of 0.8385 (2020 low Jan.24) would expose 0.8275 (2019 low Dec.13) and then 0.8248 (monthly low July 2016). On the other hand, the next up barrier lines up at 0.8478 (weekly high Jan.28) seconded by 0.8503 (55-day SMA) and finally 0.8595 (2020 high Jan.14).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

GBP/USD strengthens to near 1.3400 as UK political risk fades

The GBP/USD pair gathers strength near 1.3395 during the Asian trading hours on Thursday, bolstered by fading domestic political uncertainty. However, hawkish minutes from the Federal Reserve and renewed tensions between the US and Iran might support the US Dollar and cap the upside for the major pair.

EUR/USD sticks to positive bias above 1.1400 vs USD; Mideast tensions cap gains

The EUR/USD pair attracts some buyers for the second straight day, though it lacks follow-through and remains confined within the previous day's range during the Asian session on Thursday. Spot prices currently trade around the 1.1420 area, up less than 0.10% for the day, and remain at the mercy of the US Dollar price dynamics.

Gold keeps the red despite softer USD; stays below $4,100

Gold trades with a mild negative bias in the Asian session on Thursday, fading the overnight bounce from $4,020, or a one-week low. Minutes of the June FOMC meeting showed an evenly divided debate over the monetary policy outlook and failed to impress the US Dollar bulls, which is supporting Gold. However, fresh US-Iran tensions drive Oil higher, reviving inflation concerns and limiting the USD's downside and the bullion's rebound.

Bitcoin has yet to escape bearish conditions despite recent recovery

In a report on Wednesday, Glassnode stated that Bitcoin has continued trading beneath both the True Market Mean of $76,600 and the short-term holders cost basis of $72,200. "Until these levels are reclaimed, the market remains in deep value territory and structurally vulnerable to any external negative catalyst," Glassnode wrote.

2.50%: Why the Kiwi's first hike in three years is a wager on a number nobody can see

The Reserve Bank of New Zealand (RBNZ) raised the Official Cash Rate (OCR) by 25 basis points to 2.50% at 02:00 GMT on Wednesday, its first hike in three years and the moment the bank that cut deeper than any G10 peer last cycle turned to face the other way.

Bye, forward guidance: How to trade when central banks choose silence

Central banks have spent years telling markets what might come next. Now, traders face the possibility that they say a lot less. From the Federal Reserve to the European Central Bank and the Bank of England, policymakers are pushing back against forward guidance.