5 Nov 2013
EUR/GBP conviction on a breach of 0.84 handle?
FXstreet.com (London) - EUR/GBP has dropped from the sideways performance and support 0.8460 to currently test the handle.
Services PMI were in line with consensus for the UK that lifted Sterling and took the pair through some psychological levels. While the moves are impressive, we are yet to see the conviction from the closing levels. The NIESR report suggests the BOE may not wait for 7% unemployment before hiking and this too has had some impact. For the markets, the absolute numbers today might be less important vs the growing divergence between the ECB and BOE. Thursdays meeting and next weeks UK inflation report should only serve to highlight this and while the ECB to some extent is in the price, risk of some hawkish modifications to EFRG from the BOE could be something to watch out for.
EUR/GBP Levels
The 20 DMA is 0.8491, the 50 DMA is 0.8458 and the 200 DMA is 0.8536. RSI (14) reads 13.91. Supports are ascending from 0.8368 and 0.8376. Spot is currently 0.8400 while resistances are 0.8425, 0.8443, 0.8461and 0.8505.
Services PMI were in line with consensus for the UK that lifted Sterling and took the pair through some psychological levels. While the moves are impressive, we are yet to see the conviction from the closing levels. The NIESR report suggests the BOE may not wait for 7% unemployment before hiking and this too has had some impact. For the markets, the absolute numbers today might be less important vs the growing divergence between the ECB and BOE. Thursdays meeting and next weeks UK inflation report should only serve to highlight this and while the ECB to some extent is in the price, risk of some hawkish modifications to EFRG from the BOE could be something to watch out for.
EUR/GBP Levels
The 20 DMA is 0.8491, the 50 DMA is 0.8458 and the 200 DMA is 0.8536. RSI (14) reads 13.91. Supports are ascending from 0.8368 and 0.8376. Spot is currently 0.8400 while resistances are 0.8425, 0.8443, 0.8461and 0.8505.