19 Aug 2015
EUR/GBP upside limited at 0.7020 post FOMC minutes
FXStreet (Guatemala) - EUR/GBP is currently trading at 0.7082 with a high of 0.7093 and a low of 0.7032.
EUR/GBP continues within the better bid theme on yet further supply in the greenback post the dovish FOMC minutes that did not support a hawkish outlook for a September hike. The market is now trading above the resistance of the sideways channel that formed on the back of the slide from above 0.7110 to 0.7020's lows. This is a significant break, but needs to conquer the 0.71 handle to offer any conviction of a recovery.
Members of the FOMC board were on the fence in respect of timings of a rate hike or when wages will begin to accelerate and whether the development of wage prices might translate in to price inflation or when. There were even some downside risks to inflation outlook from some members while the conditions for firming rates have not been achieved yet. EUR/USD rallied on to the 1.1120 resistance barrier but has since met supply there, pressuring the advance in the cross by 10 pips off the high so far. However, attention may revert back to the BoE and leave the bulls exposed to risks that would correct the price back in to the broader bearish trend again.
EUR/GBP technically still bearish
Technically, further upside needs to break the 0.7120 resistance en route for the 2015 downtrend at 0.7167. While trading below these levels, the cross tirades with a bearish bias and upside failures leave the 0.6990 June low exposed. Beyond there we have the July low at 0.6937, and this would be the breakdown point to the 0.6541 2007 low.
EUR/GBP continues within the better bid theme on yet further supply in the greenback post the dovish FOMC minutes that did not support a hawkish outlook for a September hike. The market is now trading above the resistance of the sideways channel that formed on the back of the slide from above 0.7110 to 0.7020's lows. This is a significant break, but needs to conquer the 0.71 handle to offer any conviction of a recovery.
Members of the FOMC board were on the fence in respect of timings of a rate hike or when wages will begin to accelerate and whether the development of wage prices might translate in to price inflation or when. There were even some downside risks to inflation outlook from some members while the conditions for firming rates have not been achieved yet. EUR/USD rallied on to the 1.1120 resistance barrier but has since met supply there, pressuring the advance in the cross by 10 pips off the high so far. However, attention may revert back to the BoE and leave the bulls exposed to risks that would correct the price back in to the broader bearish trend again.
EUR/GBP technically still bearish
Technically, further upside needs to break the 0.7120 resistance en route for the 2015 downtrend at 0.7167. While trading below these levels, the cross tirades with a bearish bias and upside failures leave the 0.6990 June low exposed. Beyond there we have the July low at 0.6937, and this would be the breakdown point to the 0.6541 2007 low.