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Forex pairs in this Article » GBP/USD, EUR/GBP
FXstreet.com (London) - EUR/GBP has moved higher in London, moving above the consolidative range.

EUR/GBP is bid in London while GBP/USD breaks lower below the1.5000 psychological test of the downside. Carney’s first meeting made no changes to policy, although it came accompanied with a statement. In that statement, he explained that recent market rate rises were not warranted, and in fact there could even be a change in policy as early as August. There seems to be a BoE that is moving towards a form of forward guidance. We will here more on the 17th July from the inflation report and the BoE minutes, as the statement was rather vague.

EUR/GBP Risks today

Today, the risk for EUR/GBP will come again as US markets will be returning from 4th July holidays and digesting this news. Attention will be paid to the NFP’s that comes in the afternoon. The Feds forward guidance centers around the labour market developments at present and the market will be looking for a strong report to keep the expectation of first tapering of the Feds QE programme alive.

EUR/GBP price action

Yesterday, the pair broke and spiked through 0.8600, reaching 0.8634 before dropping like a stone after the ECB’s similar dovish rhetoric during the press conference. Was this a false break higher or merely premature? With the market continuing to hold over the 55 day ma at 0.8506 and the range lows at 0.8570, Karen Jones and her team of analysts at Commerzbank suspect the latter. The quote 0.8597 continues to represent a break point on the topside to the 0.8636 April high and the 0.8793/0.8814 highs seen earlier in the year. She said failure at 0.8470, although less favoured, would re-target to the 0.8422 mid-May low and the 2012-13 support line at 0.8414.
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