13 May 2015
EUR/GBP: below 0.7117 opens up 0.7014 – KBC
FXStreet (Barcelona) - The KBC Bank Research Team expects today’s BoE inflation report to affirm that deflation risks are decline, which might support further GBP strength, and further expect a EUR/GBP break below 0.7117 to lead to the lows at 0.7014.
Key Quotes
“Investors look out today for the BoE’s inflation report, that will most likely be the dominating factor for sterling trading. The BoE probably won’t make a U-turn, but will reaffirm that the next rate move will be a hike. At the same time, the bank might also indicate that downside inflation risks (deflation) are declining. If so, this might support sterling, especially as momentum in the euro and the dollar isn’t really that strong currently.”
“EUR/GBP closed the session at 0.7175. Cable set a new ST correction low and closed the session at 1.5586.”
“Technicals may play a key role. EUR/GBP is near the support at 0.7117, which if broken would bring the focus immediately on the cycle lows of 0.7014.”
“We have the impression that sterling is already positioned for a not too soft inflation report. The day-to-day momentum looks constructive for sterling, especially against the euro. Even so, we expect the recent low in EUR/GBP (0.7118) to be a very though support.”
“For cable, also the US retail sales might come into play. Cable recently broke above 1.5552 resistance, setting a nice inverted head and shoulder, which if confirmed would be a positive for cable.”
Key Quotes
“Investors look out today for the BoE’s inflation report, that will most likely be the dominating factor for sterling trading. The BoE probably won’t make a U-turn, but will reaffirm that the next rate move will be a hike. At the same time, the bank might also indicate that downside inflation risks (deflation) are declining. If so, this might support sterling, especially as momentum in the euro and the dollar isn’t really that strong currently.”
“EUR/GBP closed the session at 0.7175. Cable set a new ST correction low and closed the session at 1.5586.”
“Technicals may play a key role. EUR/GBP is near the support at 0.7117, which if broken would bring the focus immediately on the cycle lows of 0.7014.”
“We have the impression that sterling is already positioned for a not too soft inflation report. The day-to-day momentum looks constructive for sterling, especially against the euro. Even so, we expect the recent low in EUR/GBP (0.7118) to be a very though support.”
“For cable, also the US retail sales might come into play. Cable recently broke above 1.5552 resistance, setting a nice inverted head and shoulder, which if confirmed would be a positive for cable.”