EURGBP, H1 and Daily
Sterling has rallied forth today, with Her Majestry’s currency presently showing a 0.4% gain versus the dollar, euro and yen. This has carried Cable to a three-week high at 1.4021, with Support is at 1.4010, and resistance at 1.4145. The EURGBP to a seven-week low at 0.8761. The bid has been fuelled on the expectation of there being positive news on a post-Brexit transition agreement from today’s meeting of respective UK and EU chief Brexit negotiators, Davis and Barnier, who will later hold a joint press conference. This is more of a bullish talking point for interbank and short-term speculative traders as there meeting won’t yield anything concrete. This comes ahead of this week’s two-day EU leaders’ summit, on Thursday-Friday, where the 27 are expected to agree a roadmap for a post-Brexit transition period.
Tomorrow’s release of UK inflation data for February will be a focus, where we expect a dip in the headline CPI rate to 2.8% y/y from 3.0% y/y (median same).
EURGBP has been trending moderately lower over the last three weeks, while today pair broke month’s support at 0.8770. Today’s negative momentum has been extremely high, with pair moving 50 pips lower so far, breaking outside Daily Bollinger Band pattern and creating a Bearish rounding top. Hence it is currently retesting the next support level at 0.8745, while the 2nd support comes down to January’s low at 0.8690.
Hence by considering that EURGBP, has descended further into three-month low terrain on pound out-performance further downwards movement might be seen, especially on positive news on a Brexit transition agreement from the meeting of respective UK and EU negotiators.
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Andria Pichidi
Market Analyst
HotForex
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