27 Apr 2015
EUR/GBP: Plenty of risk ahead in FOMC
FXStreet (Guatemala) - EUR/GBP is currently trading at 0.7143 with a high of 0.7171 and a low of 0.7140.
EUR/GBP is offered on the back of of Sterling's strength, as it challenges tough resistance here and eye's higher levels still. However, there is plenty of risk ahead and trade may flow through the dollar this week on the back of the FOMC statement and anything less than dovish will under pin the greenback in the sense of a rate hike could still be on the cards for this year, weakening the pound just perhaps not as early as June given the recent downgrading from the IMF and less than satisfactory data releases such from the US.
The EZ remains with a dark shadow over it due to the Greek debt situation and lack of progress there between Greek and EZ ministers and the Eurogroup while this week will bring us fresh data with the German CPI's m/m and y/y. Meanwhile, sterling remains bid on the interest rate differentials and prospects while Draghi sticks to the QE plan and the UK continues to recover which Carney expresses and becomes hawkish in his rhetoric.
Technically, Karen Jones, chief analyst at Commerzbank explained, "The market faces tough resistance starting with the cloud base at 0.7191 and the downtrend and 55 day ma at 0.7251/73. 55-day moving average is at 0.7267. While capped here a negative bias will persist and we would allow for a retest of the 0.7015 March low and 0.7000 psychological support. Currently this is indicated to hold the downside again. A close below here will see the next major downside target engage at 0.6571/41, the 2007 low."
EUR/GBP is offered on the back of of Sterling's strength, as it challenges tough resistance here and eye's higher levels still. However, there is plenty of risk ahead and trade may flow through the dollar this week on the back of the FOMC statement and anything less than dovish will under pin the greenback in the sense of a rate hike could still be on the cards for this year, weakening the pound just perhaps not as early as June given the recent downgrading from the IMF and less than satisfactory data releases such from the US.
The EZ remains with a dark shadow over it due to the Greek debt situation and lack of progress there between Greek and EZ ministers and the Eurogroup while this week will bring us fresh data with the German CPI's m/m and y/y. Meanwhile, sterling remains bid on the interest rate differentials and prospects while Draghi sticks to the QE plan and the UK continues to recover which Carney expresses and becomes hawkish in his rhetoric.
Technically, Karen Jones, chief analyst at Commerzbank explained, "The market faces tough resistance starting with the cloud base at 0.7191 and the downtrend and 55 day ma at 0.7251/73. 55-day moving average is at 0.7267. While capped here a negative bias will persist and we would allow for a retest of the 0.7015 March low and 0.7000 psychological support. Currently this is indicated to hold the downside again. A close below here will see the next major downside target engage at 0.6571/41, the 2007 low."