25 Sep 2013
EUR/GBP downwards on solid UK CBI data
FXstreet.com (Athens)- While the EUR/GBP was heading slightly upwards since the early European trading session –despite the dismal German IFO release- it is now moving sharply downwards on great UK data.
UK CBI data boost again the sterling, EUR/GBP losing almost 20 pips
The EUR/GBP was hovering around 0.8444 area, despite the fact that German IFO missed expectations, despite released higher for a fifth straight month. To elaborate on, it fell shy of the consensus forecast of 108.2 as it was announced at 107.7 from 107.6, the previous month. However, the single currency mainly boosted by yesterday’s Draghi’s position that “the ECB is prepared to do more if needed, including another LTRO” was generally boosted across the board assisting the pair to move further upwards. But when much better than expected CBI released, the sterling gained solid ground dragging the pair downwards to the area as of 0.8423.
Technical Analysis and Strategic Bias on EUR/GBP
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “EUR/GBP has held below the initial resistance at 0.8470 (June low). The market last week charted a key day reversal, RSI divergence and a 13 count and is expected to see more of a follow through rally into this week. This is viewed as merely a correction of the recent sharp sell off, which has been evident since the beginning of August. Any rebounds will find initial resistance at the June low at 0.8470 and the 38.2% retracement at .8500. We would allow for a rally towards as far as the 2 month downtrend at 0.8536, but then look for that to cap. Longer term the market has reversed from the top of a 4 year channel and longer term downside targets of 0.8280/0.8155/0.7980 have been introduced (Fibonacci retracements of the move up from 2012).”
UK CBI data boost again the sterling, EUR/GBP losing almost 20 pips
The EUR/GBP was hovering around 0.8444 area, despite the fact that German IFO missed expectations, despite released higher for a fifth straight month. To elaborate on, it fell shy of the consensus forecast of 108.2 as it was announced at 107.7 from 107.6, the previous month. However, the single currency mainly boosted by yesterday’s Draghi’s position that “the ECB is prepared to do more if needed, including another LTRO” was generally boosted across the board assisting the pair to move further upwards. But when much better than expected CBI released, the sterling gained solid ground dragging the pair downwards to the area as of 0.8423.
Technical Analysis and Strategic Bias on EUR/GBP
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “EUR/GBP has held below the initial resistance at 0.8470 (June low). The market last week charted a key day reversal, RSI divergence and a 13 count and is expected to see more of a follow through rally into this week. This is viewed as merely a correction of the recent sharp sell off, which has been evident since the beginning of August. Any rebounds will find initial resistance at the June low at 0.8470 and the 38.2% retracement at .8500. We would allow for a rally towards as far as the 2 month downtrend at 0.8536, but then look for that to cap. Longer term the market has reversed from the top of a 4 year channel and longer term downside targets of 0.8280/0.8155/0.7980 have been introduced (Fibonacci retracements of the move up from 2012).”