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6 Sep 2013
EUR/GBP testing lower, 0.8400 handle
FXstreet.com (London) - EUR/GBP is overall on the offer yet again at the end of a disappointing week for the pair.
EUR/GBP has struggled this week, dropping from 0.8520 and has continued to deteriorate on a factors. Firstly, the numbers in data didn’t live up to expectations from the EZ. “…The Euro still gives me the impression of having run out of steam as the rates market can't keep on following the US blindly… sticking long in rates and short of EUR… is one trade which probably does OK in the short and medium terms”, said Kit Juckes, Head of Currency Strategy at Societe Generale. For Sterling, a boost came this week from a slight improvement in Markit Services PMI earlier in the week and today, industrial and manufacturing production beat expectations albeit only marginally. The BoE offered much of the same low for longer approach as the ECB.
EUR/GBP negative bias
Karen Jones, chief analyst at Commerzbank noted that EUR/GBP has eroded and closed below the 0.8470 June low and 2090 day ma – this is viewed as negative. “Intraday rallies should now remain capped by the .8528 previous 2012-2013 uptrend (this should now act as resistance) and will find initial resistance at .8480/.8500 for another leg down to the 0.8399 2013 low and .8366 the 200 week ma”. She continued to suggest that longer term, the market has reversed from the top of a 4 year channel and longer term targets of 0.8280/0.8155/0.7980 have been introduced (Fibonacci retracements of the move up from 2012).
EUR/GBP has struggled this week, dropping from 0.8520 and has continued to deteriorate on a factors. Firstly, the numbers in data didn’t live up to expectations from the EZ. “…The Euro still gives me the impression of having run out of steam as the rates market can't keep on following the US blindly… sticking long in rates and short of EUR… is one trade which probably does OK in the short and medium terms”, said Kit Juckes, Head of Currency Strategy at Societe Generale. For Sterling, a boost came this week from a slight improvement in Markit Services PMI earlier in the week and today, industrial and manufacturing production beat expectations albeit only marginally. The BoE offered much of the same low for longer approach as the ECB.
EUR/GBP negative bias
Karen Jones, chief analyst at Commerzbank noted that EUR/GBP has eroded and closed below the 0.8470 June low and 2090 day ma – this is viewed as negative. “Intraday rallies should now remain capped by the .8528 previous 2012-2013 uptrend (this should now act as resistance) and will find initial resistance at .8480/.8500 for another leg down to the 0.8399 2013 low and .8366 the 200 week ma”. She continued to suggest that longer term, the market has reversed from the top of a 4 year channel and longer term targets of 0.8280/0.8155/0.7980 have been introduced (Fibonacci retracements of the move up from 2012).