EUR/GBP – Headed Below 84 Cents

EUR/GBP – Headed Below 84 Cents

EUR/GBP – Headed Below 84 Cents

Sterling is quietly drifting higher, pushing EUR/GBP lower in the process. This is a big week for GBP with inflation, employment and consumer spending numbers scheduled for release along with the Bank of England’s monetary policy announcement. Driven by the weak sterling, consumer and Producer prices, which are scheduled for release tomorrow are expected to rise strongly in the month of August. If you recall in their Quarterly Inflation Report, the Bank of England raised its CPI forecast. They now see reaching their 2% price target in Q4 of 2017 instead of Q2 of 2018. If CPI beats, sterling will extend its gains driving EUR/GBP below 84 cents.

Technically EUR/GBP rejected the 50-day SMA on 3 separate occasions. This 4 hour chart show some support at 0.8425 and for that reason we could see a bounce to 0.8440 (which is why we exited our trade) but if the 50-hour SMA (blue line) is broken, then EUR/GBP will make a run for 0.84 cents. If CPI is strong enough, we could even see 0.8350.

Chart Of The Day

Leave a Comment

Your email address will not be published. Required fields are marked *