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2 Oct 2013
EUR/GBP gets a lift-up on supportive ECB, IMF comments
FXstreet.com (Athens) – The EUR/GBP regains a slight uptrend momentum after having moved on the down side the last couple of hours.
EUR/GBP eases as PM Letta has enough votes to hold coalition
The EUR/GBP was moving downwards the last couple of hours, but after the ECB meeting kicked-off it soon regained uptrend momentum. Traders might consider a few reasons that the pair changed its prior trend and now is heading the upper level; we should firstly point out that Italian yields falling as it appears PM Letta has enough votes to hold coalition. It seems that the Italian political jitters will soon fade away, as the splits in the PDL will probably allow the Italian PM to win a confidence vote in parliament, which is likely later today. What’s more, IMF's Shafik said a couple of minutes earlier that “IMF is "very supportive" of ECB's forward guidance monetary policy”, while EU lawmaker Hoekmark mentioned that “European Union shouldn't shut the door on bank nationalization.” Last but not least, EU's Van Rompuy says jobless rate in many nations still "devastatingly high," says ECB policy continues to support economic recovery.
Technical Outlook on EUR/GBP
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “EUR/GBP remains under pressure, it has recently stalled ahead of the June low at .8470 and the 38.2% retracement at .8500. This resistance is reinforced by the 2 month downtrend at .8506 and we maintain our bearish bias while capped here. Intraday rallies should struggle .8400/5. Focus is on the .8332September low, which is exposed. Longer term the market has reversed from the top of a 4 year channel and longer term downside targets of .8280/.8155/.7980 have been introduced (Fibonacci retracements of the move up from 2012). Short term loss of the .8332 September low is expected to signal another leg lower is underway.”
EUR/GBP eases as PM Letta has enough votes to hold coalition
The EUR/GBP was moving downwards the last couple of hours, but after the ECB meeting kicked-off it soon regained uptrend momentum. Traders might consider a few reasons that the pair changed its prior trend and now is heading the upper level; we should firstly point out that Italian yields falling as it appears PM Letta has enough votes to hold coalition. It seems that the Italian political jitters will soon fade away, as the splits in the PDL will probably allow the Italian PM to win a confidence vote in parliament, which is likely later today. What’s more, IMF's Shafik said a couple of minutes earlier that “IMF is "very supportive" of ECB's forward guidance monetary policy”, while EU lawmaker Hoekmark mentioned that “European Union shouldn't shut the door on bank nationalization.” Last but not least, EU's Van Rompuy says jobless rate in many nations still "devastatingly high," says ECB policy continues to support economic recovery.
Technical Outlook on EUR/GBP
Karen Jones, Head Technical Analyst at Commerzbank suggests that the “EUR/GBP remains under pressure, it has recently stalled ahead of the June low at .8470 and the 38.2% retracement at .8500. This resistance is reinforced by the 2 month downtrend at .8506 and we maintain our bearish bias while capped here. Intraday rallies should struggle .8400/5. Focus is on the .8332September low, which is exposed. Longer term the market has reversed from the top of a 4 year channel and longer term downside targets of .8280/.8155/.7980 have been introduced (Fibonacci retracements of the move up from 2012). Short term loss of the .8332 September low is expected to signal another leg lower is underway.”