简体中文
繁體中文
English
Pусский
日本語
ภาษาไทย
Tiếng Việt
Bahasa Indonesia
Español
हिन्दी
Filippiiniläinen
Français
Deutsch
Português
Türkçe
한국어
العربية
Abstract:Two weak currencies that are currently looking ahead to potentially defining moments that will provide a clear signal for both. How will they compare against each other?
EURGBP News, Price Chart and Analysis
Sterlings value remains all about Brexit.
This Thursdays ECB meeting will be key for the Euros future.
Q3 2019 GBP and EUR Forecasts and Top Trading Opportunities
A look at the latest chart shows a near 50% retracement of the May 5 – August 12 EURGBP rally, leaving traders looking for clues for the next move. The rally was primarily fueled by GBP weakness, as Brexit fears increased as then PM Theresa May‘s role came to a fractious end, only to be replaced by current PM Boris Johnson whose leadership has been undermined, internally and externally, ever since he accepted the role in late-July. While the UK Parliament is now suspended for five weeks ahead of the Queen’s speech, Brexit news flow will continue to dictate the fortunes of the British Pound.
In Europe, this weeks ECB monetary policy meeting (Thursday September 12) is expected to see the central bank cut interest rates further into negative territory and either announce details of or start a new round of bond buying (quantitative easing) in a renewed push to boost the ailing Euro-Zone economy. The ECB may even cut rates by more than expected – current expectations are 10 basis points to -0.50% - to get ahead of the game and the central bank may provide even more dovish guidance for the months ahead.
Live Coverage of the ECB Meeting from 11.30 GMT on Thursday - Webinar
For all economic and data releases see the DailyFX Economic Calendar
Both Brexit and expectations of ECB monetary loosening have impacted on their respective currencies in the last weeks, with both showing renewed weakness. As mentioned early, this years EURGBP rally has partially reversed, leaving the daily chart offering a few levels that need to be monitored.
The 50% Fibonacci retracement level of the move is set at 0.89077, a level briefly touched on Monday before todays minor rebound. This Fib level guards the July 25 low at 0.88918 before the 200-day moving average at 0.88180 and the 61.8% retracement level at 0.88093 come into play. These levels need to be monitored by traders who believe that that Sterling will outperform the Euro in the short-term.
For traders who believe that the Euro will outperform Sterling, the 38.2% retracement level at 0.90062 is the first target, before the 20- and 50-day moving averages currently at 0.90460 and 0.90850 hove into view.
EURGBP Daily Price Chart (December 2018 - September 10, 2019)
IG Client Sentiment data show that of retail traders are 33.7% net-long of EURGBP, a bullish contrarian indicator. However, recent daily and weekly positional changes give us a strongerEURGBPbullish contrarian bias.
Disclaimer:
The views in this article only represent the author's personal views, and do not constitute investment advice on this platform. This platform does not guarantee the accuracy, completeness and timeliness of the information in the article, and will not be liable for any loss caused by the use of or reliance on the information in the article.
This year's arbitrage gains have been erased, with 65%-75% of these positions closed. The dollar's reaction has been as expected but slightly disappointing, with a significant 100 basis point rise in U.S. short-term interest rates impacting it. JPMorgan has reduced its dollar forecasts, now predicting USD/JPY at $146 in Q4 2024 and $144 in Q2 2025, down from $147. Despite a weakening job market, other economic data remains strong.
This week's global market analysis covers significant movements and events. Fed Chairman Powell's cautious stance on interest rates impacts the USD. TSMC benefits from Samsung's strike. Geopolitical tensions rise with Putin's diplomacy. PBOC plans bond sales to stabilize CNY. Key economic events include Core CPI, PPI, and Michigan Consumer Sentiment for the USA, and GDP data for the UK. These factors influence currency movements and market sentiment globally.
The Federal Reserve is expected to keep interest rates unchanged, which could support the US dollar and pressure gold prices if a hawkish stance is taken. Gold prices continue to decline after breaking an upward wedge pattern, with a key support level at $2250. The 14-day RSI indicates further potential decline unless prices recover above the 50-day and 21-day moving averages.
As Brexit talks persist, the BOE remains sidelined. And with the UK parliament prorogued, all attention is on UK PM Johnson's talks with his EU counterparts.