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Eur-gbp

EURGBP on a bearish outlook 🦐EURGBP after the recent lows tested perfectly our belove 0.618 Fibonacci retracement. The price is now trading above a daily support and we can expect some further bearish move. How can i approach this scenario? I will wait for a break below and in that case i will look for a nice short order according to the Plancton's strategy rules. ––––– Follow the Shrimp 🦐 Keep in mind. 🟣 Purple structure -> Monthly structure. 🔴 Red structure -> Weekly structure. 🔵 Blue structure -> Daily structure. 🟡 Yellow structure -> 4h structure. ⚫️ Black structure -> <4h structure. Here is the Plancton0618 technical analysis , please comment below if you have any question. The ENTRY in the market will be taken only if the condition of the Plancton0618 strategy will trigger.
Short
by InkyGrip
8
EURGBP - Wait For The Trigger!Hello TradingView Family / Fellow Traders. This is Richard, as known as theSignalyst. As per my previous EURGBP idea, highlighted on the chart, we will be looking for sell setups as price approaches the green resistance zone. on H1: EURGBP is forming a channel in red but the lower trendline is not valid yet. So we will be waiting for a third swing to form around it to consider it our trigger swing. Trigger => waiting for that third swing to form and then sell after a momentum candle close below the gray zone. Meanwhile, until the sell is activated, EURGBP can still trade higher. Which scenario do you think is more probable and why? Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
Short
by TheSignalyst
6
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE In recent weeks, the persistently high inflation has seen the ECB take a more hawkish turn with the bank hiking rates by 50bsp at their July meeting. But the bank quelled any hawkish excitement by explaining they are frontloading hikes and not signalling a higher terminal rate with their bigger than expected July hike. At their July meeting the bank also failed to ease spread fragmentation concerns with their new Transmission Protection Instrument (TPI) as the eligibility criteria means countries that will need the support the most might have a tough time qualifying. Combined with Italian political concerns, further spread widening looks likely. Right now, even though policy and spreads are important, the main story and driver for the EUR is the economic outlook. Recent growth data continues to surprise to the downside at a rapid pace further stoking recession fears for the Eurozone. Even though the bias remains lower, a lot of negatives have been priced in from a tactical point of view though. POSSIBLE BULLISH SURPRISES De-escalation or cease fire in Ukraine would open up a lot of EUR upside. Also keep Italian politics in mind where successful attempts to avoid a snap election could ease spread widening & support the EUR. Stagflation remain high and recent data has invigorated recession fears, but with lots of bad news priced any materially better-than-expected growth data could spark some relief. Spread fragmentation remains a concern, especially with Italian politics and the ECB’s failed attempt to reassure markets. Any TPI comments that convinces markets it can solve fragmentation issues should be supportive for the EUR. Energy concerns are still in focus, which means watching the Nord Stream 1 flows, if Russia increases gas flows to more regular levels it should ease some energy supply issues. Rhine river concerns are one to watch, any good news on water levels and resumption of normal transport could be a bullish catalyst for the EUR. POSSIBLE BEARISH SURPRISES Any escalation in the Ukraine war that risks including NATO would be big negative risks. Also keep Italian politics in mind, where any failed attempts to avoid a snap election should add further pressure on the EUR. Growth concerns continue to weigh on the EUR and means any major negative surprises in incoming growth data (German ZEW data next week) could trigger downside in the EUR. Spread fragmentation remains in focus, and if the ECB fails to act when we see big jolts higher in the BTP/Bund spread it could trigger bearish reactions in the EUR. Energy concerns are still in focus, which means watching the Nord Stream 1 flows, if Russia decreases gas flows again it should increase concerns and weigh on the EUR. Rhine river concerns are one to watch, any bad news on water levels and continued breakdown in transportation could be a bearish catalyst for the EUR. BIGGER PICTURE The fundamental outlook remains bearish with recent leading indicators pointing to a much faster economic slowdown than markets had previously expected. The current bearish drivers (geopolitics, stagflation, spread fragmentation, energy supply concerns) far outweigh the positives from a hawkish ECB. Recession risks open up a narrative change for the EUR which will require markets to adjust forecasts to reflect higher recession probabilities which should weigh on the EUR. Having said that, with lots of bad news priced there is some asymmetric risk to incoming data which means chasing at the lows are dangerous. GBP FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE The overall bleak economic outlook for the UK, with exceptionally high Inflation and rapidly falling growth have been the biggest negative driver for Sterling. At their August meeting, the BoE confirmed this bleak outlook by forecasting the UK economy to fall into recession by 4Q22 and expects the recession to last for five quarters. Even though the bank followed through with a 50bsp hike, it wasn’t enough to offset the recession forecasts. With inflation expected to reach close to 13%, the bank is stuck between a rock and a hard place as they are forced to keep hiking rates to try and fight inflation but by doing so, they risk further damaging economic growth as a result. Even though Sterling is still fairly close to recent lows (at the index level), the recent bounce was enough to short into, and we saw sizeable downside following the BoE decision. It seems unlikely that the post-BoE price action reflects a market that has already priced in a 5-quarter recession, so we expect sentiment to remain bearish on Sterling for now. POSSIBLE BULLISH SURPRISES Stagflation fears are very high for the UK, with probabilities of recession growing by the week. With a recession now the base assumption, any incoming news that surprises meaningfully higher could trigger some relief. The UK is facing a huge cost-of-living squeeze, which means lower-than-expected inflation could counterintuitively be a positive driver (as lower CPI means less stagflation risk). The economy needs help right now, which means any help from the fiscal side will be a positive. Any major fiscal support measures to help consumers (subsidies for energy or tax cuts) could trigger bullish reactions for the Pound. Any overly hawkish fiscal promises from PM candidates which eases recession fears could be a positive trigger for Sterling. Any overly hawkish comments signalling more aggressive policy than what markets are currently pricing in could trigger bullish reactions. POSSIBLE BEARISH SURPRISES Odds that the BoE has limited hikes left has been a negative driver, but so too is risks that inflation forces them to hike even more and further damage GDP. Further stagflation risks from higher gas prices or CPI could trigger bearish reactions. Politicsremain a focus, where any attempts by a new PM in the weeks or months ahead to call for a snap election should cause unnecessary uncertainty and could trigger GBP downside. With UK threats of triggering Article 16 and EU threats to terminate the Brexit deal if they do Brexit is in focus again. For now, markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. Any overly dovish fiscal promises from PM candidates that increase recession fears could be a negative trigger for Sterling Any overly dovish comments signalling less aggressive policy than what markets are currently pricing in could trigger bearish GBP reactions. BIGGER PICTURE The fundamental outlook for the GBP remains bleak, especially after the BoE’s recent forecasts of a 5-quarter recession in the UK. Furthermore, given the risks to growth, there is growing speculation that the BoE might not be too far away from pausing. Anything that exacerbates stagflation fears is expected to weigh on the Pound and anything that alleviates some of that pressure should be positive. The post-BoE price action was big, but not big enough for a market that has priced in a deep recession, which means we would expect sentiment to remain soft on Sterling after the most recent BoE meeting, but incoming data this week could trigger short-term sentiment reactions as always.
by thunderpips
EURGBP can move lower? 🦐EURGBP on the 4h chart broke retes the 0,84800 area with a strong retracement from the recent lows. How can i approach this scenario? I will wait for the EU market open and if the price will break below i will look for a nice short order according to the Plancton's strategy rules. ––––– Follow the Shrimp 🦐 Keep in mind. 🟣 Purple structure -> Monthly structure. 🔴 Red structure -> Weekly structure. 🔵 Blue structure -> Daily structure. 🟡 Yellow structure -> 4h structure. ⚫️ Black structure -> <4h structure. Here is the Plancton0618 technical analysis , please comment below if you have any question. The ENTRY in the market will be taken only if the condition of the Plancton0618 strategy will trigger.
Short
by InkyGrip
EURGBP Rejected on the 1D MA200The EURGBP pair has been trading within a Channel Down since the June 15 High. It is making Lower Lows on the 1.382 Fibonacci extension each time. On Friday the price got rejected on the 1D MA200 (orange trend-line) and today it is reversing lower. Keep in mind that the previous Lower High got rejected on the 1D MA50 (blue trend-line). It appears that this is an ideal sell opportunity on the medium-term. You can target 0.8250, which isn't just the 1.382 Fib extension but also the April 14 Low, rendering this level as the next horizontal Support. -------------------------------------------------------------------------------------------------------- Please like, subscribe and share your ideas and charts with the community! --------------------------------------------------------------------------------------------------------
Short
by TradingShot
1
EURGBP looking for the 0.618? 🦐EURGBP on the 4h chart after the recent low at the 0.83500 is starting a retracement to the upside. The market is now trading below a minor resistance and a test of the 0.382 Fibonacci can be expected soon. How can i approach this scenario? I will wait for the break of the resistance level and in that case, i will look for a nice long order according to the Plancton's strategy rules. ––––– Follow the Shrimp 🦐 Keep in mind. 🟣 Purple structure -> Monthly structure. 🔴 Red structure -> Weekly structure. 🔵 Blue structure -> Daily structure. 🟡 Yellow structure -> 4h structure. ⚫️ Black structure -> <4h structure. Here is the Plancton0618 technical analysis , please comment below if you have any question. The ENTRY in the market will be taken only if the condition of the Plancton0618 strategy will trigger.
Long
by InkyGrip
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE In recent weeks, the persistently high inflation has seen the ECB take a more hawkish turn with the bank hiking rates by 50bsp at their July meeting. But the bank quelled any hawkish excitement by explaining they are frontloading hikes and not signalling a higher terminal rate with their bigger than expected July hike. At their July meeting the bank also failed to ease spread fragmentation concerns with their new Transmission Protection Instrument (TPI) as the eligibility criteria means countries that will need the support the most might have a tough time qualifying. Combined with Italian political concerns, further spread widening looks likely. Right now, even though policy and spreads are important, the main story and driver for the EUR is the economic outlook. Recent growth data continues to surprise to the downside at a rapid pace further stoking recession fears for the Eurozone. Even though the bias remains lower, a lot of negatives have been priced in from a tactical point of view. POSSIBLE BULLISH SURPRISES De-escalation or cease fire in Ukraine would open up a lot of EUR upside. Also keep Italian politics in mind where successful attempts to avoid a snap election could ease spread widening & support the EUR. Stagflation remain high and recent data has invigorated recession fears, but with lots of bad news priced any materially better-than-expected growth data could spark some relief. Spread fragmentation remains a concern, especially with Italian politics and the ECB’s failed attempt to reassure markets. Any TPI comments that convinces markets it can solve fragmentation issues should be supportive for the EUR. Energy concerns are still in focus, which means watching the Nord Stream 1 flows, if Russia increases gas flows to more regular levels it should ease some energy supply issues. POSSIBLE BEARISH SURPRISES Any escalation in the Ukraine war that risks including NATO would be big negative risks. Also keep Italian politics in mind, where any failed attempts to avoid a snap election should add further pressure on the EUR. Growth concerns continue to weigh on the EUR and means any major negative surprises in incoming growth data could trigger further downside in the EUR. Spread fragmentation remains in focus, and if the ECB fails to act when we see big jolts higher in the BTP/Bund spread it could trigger bearish reactions in the EUR. Energy concerns are still in focus, which means watching the Nord Stream 1 flows, if Russia decreases gas flows again it should increase concerns and weigh on the EUR. BIGGER PICTURE The fundamental outlook remains bearish with recent leading indicators pointing to a much faster economic slowdown than markets had previously expected. The current bearish drivers (geopolitics, stagflation, spread fragmentation, energy supply concerns) far outweigh the positives from a hawkish ECB. Recession risks open up a narrative change for the EUR which will require markets to adjust forecasts to reflect higher recession probabilities which should weigh on the EUR. Having said that, with lots of bad news priced there is some asymmetric risk to incoming data which means chasing at the lows are dangerous. GBP FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE The overall bleak economic outlook for the UK, with exceptionally high Inflation and rapidly falling growth have been the biggest negative driver for Sterling. At their August meeting, the BoE confirmed this bleak outlook by forecasting the UK economy to fall into recession by 4Q22 and expects the recession to last for five quarters. Even though the bank followed through with a 50bsp hike, it wasn’t enough to offset the recession forecasts. With inflation expected to reach close to 13%, the bank is stuck between a rock and a hard place as they are forced to keep hiking rates to try and fight inflation but by doing so, they risk further damaging economic growth as a result. Even though Sterling is still fairly close to recent lows (at the index level), the recent bounce was enough to short into, and we saw sizeable downside following the BoE decision. It seems unlikely that the post-BoE price action reflects a market that has already priced in a 5-quarter recession, so we expect sentiment to remain bearish on Sterling for now. POSSIBLE BULLISH SURPRISES Stagflation fears are very high for the UK, with probabilities of recession growing by the week. With a recession now the base assumption, any incoming news that surprises meaningfully higher could trigger some relief. The UK is facing a huge cost-of-living squeeze, which means lower-than-expected inflation could counterintuitively be a positive driver (as lower CPI means less stagflation risk). The economy needs help right now, which means any help from the fiscal side will be a positive. Any major fiscal support measures to help consumers (subsidies for energy or tax cuts) could trigger bullish reactions for the Pound. Any overly hawkish comments signalling more aggressive policy than what markets are currently pricing in could trigger bullish reactions. POSSIBLE BEARISH SURPRISES Odds that the BoE has limited hikes left has been a negative driver, but so too is risks that inflation forces them to hike even more and further damage GDP. Further stagflation risks from higher gas prices or CPI could trigger bearish reactions. Politicsremain a focus, where any attempts by a new PM in the weeks or months ahead to call for a snap election should cause unnecessary uncertainty and could trigger GBP downside. With UK threats of triggering Article 16 and EU threats to terminate the Brexit deal if they do Brexit is in focus again. For now, markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. Any overly dovish comments signalling less aggressive policy than what markets are currently pricing in could trigger bearish GBP reactions. BIGGER PICTURE The fundamental outlook for the GBP remains bleak, especially after the BoE’s recent forecasts of a 5-quarter recession in the UK. Furthermore, given the risks to growth, there is growing speculation that the BoE might not be too far away from pausing. Anything that exacerbates stagflation fears is expected to weigh on the Pound and anything that alleviates some of that pressure should be positive. The post-BoE price action was big, but not big enough for a market that has priced in a deep recession, which means we would expect sentiment to remain soft on Sterling after last week’s BoE.
by thunderpips
Joe Gun2Head Trade - Selling EURGBP into resistanceTrade Idea: Selling EURGBP Reasoning: Rallied into the neckline of a head and shoulders pattern (Daily Chart) Entry Level: 0.8419 Take Profit Level: 0.8346 Stop Loss: 0.8439 Risk/Reward: 3.2:1 Disclaimer – Signal Centre. Please be reminded – you alone are responsible for your trading – both gains and losses. There is a very high degree of risk involved in trading. The technical analysis , like all indicators, strategies, columns, articles and other features accessible on/though this site is for informational purposes only and should not be construed as investment advice by you. Your use of the technical analysis , as would also your use of all mentioned indicators, strategies, columns, articles and all other features, is entirely at your own risk and it is your sole responsibility to evaluate the accuracy, completeness and usefulness (including suitability) of the information. You should assess the risk of any trade with your financial adviser and make your own independent decision(s) regarding any tradable products which may be the subject matter of the technical analysis or any of the said indicators, strategies, columns, articles and all other features.
Short
by Signal_Centre
Any gains to be limited on EURGBPEURGBP - Intraday - We look to Sell at 0.8415 (stop at 0.8440) Although the bears are in control, the stalling negative momentum indicates a turnaround is possible. A higher correction is expected. The bias is still for lower levels and we look for any gains to be limited. We therefore, prefer to fade into the rally with a tight stop in anticipation of a move back lower. Our profit targets will be 0.8340 and 0.8325 Resistance: 0.8400 / 0.8460 / 0.8520 Support: 0.8325 / 0.8200 / 0.8060 Risk Disclaimer The trade ideas beyond this page are for informational purposes only and do not constitute investment advice or a solicitation to trade. This information is provided by Signal Centre, a third-party unaffiliated with OANDA, and is intended for general circulation only. OANDA does not guarantee the accuracy of this information and assumes no responsibilities for the information provided by the third party. The information does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. You accept that you assume all risks in independently viewing the contents and selecting a chosen strategy. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, Oanda Asia Pacific Pte Ltd (“OAP“) accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore customers should contact OAP at 6579 8289 for matters arising from, or in connection with, the information/research distributed.'
Short
by OANDA
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE In recent weeks, the persistently high inflation has seen the ECB take a more hawkish turn with the bank hiking rates by 50bsp at their July meeting. But the bank quelled any hawkish excitement by explaining they are frontloading hikes and not signalling a higher terminal rate with their bigger hike. At their July meeting the bank also failed to ease spread fragmentation concerns with their new Transmission Protection Instrument (TPI) as the eligibility criteria means countries that will need the support the most might have a tough time qualifying. Combined with Italian political concerns, further spread widening looks likely. Right now, even though policy and spreads are important, the main story and driver for the EUR is the economic outlook. Recent growth data continues to surprise to the downside at a rapid pace further stoking recession fears for the Eurozone. As long as data surprises lower and spreads remain high the bias for the EUR remains firmly in bearish territory. POSSIBLE BULLISH SURPRISES Geopolitics remains important where any de-escalation or cease fire in Ukraine would open up a lot of EUR upside. Also keep Italian politics in mind where successful attemptsto avoid a snap election could ease spread widening & support the EUR. Stagflation fears are high, with growth expected to slow with inflation still. Recent PMI data has invigorated recession fears, which means any materially better-than-expected growth data (DE Factory Orders & Industrial Production this week) could spark some relief for the EUR. Spread fragmentation remains a concern, especially with Italian politics and the ECB’s failed attempt to reassure markets about their new TPI tool. Any comments about TPI that convinces markets it can solve fragmentation issues should be supportive for the EUR. Energy concerns are still in focus, which means watching the Nord Stream 1 flows, if Russia increases gas flows to more regular levels it should ease some energy supply issues. POSSIBLE BEARISH SURPRISES Geopolitics remain in focus, any escalation in the Ukraine war that risks including NATO would be big negative risks. Also keep Italian politics in mind, where any failed attempts to avoid a snap election should add further pressure on the EUR. Growth concerns continue to weigh on the EUR and means any major negative surprises in incoming growth data (DE Factory Orders & Industrial Production this week) could trigger further downside in the EUR. Spread fragmentation remains in focus, and if the ECB fails to act with big jolts higher in the BTP/Bund spread it could trigger bearish reactions in the EUR. We've seen a chunky repricing in hike expectations over the past three weeks, and any further lower repricing is expected to weigh on the EUR. Energy concerns are still in focus, which means watching the Nord Stream 1 flows, if Russia decreases gas flows again it should increase concerns and weigh on the EUR. BIGGER PICTURE The fundamental outlook remains bearish for the EUR with recent leading indicators pointing to a much faster economic slowdown than markets had previously expected. The current bearish drivers (geopolitics, stagflation, spread fragmentation, energy supply concerns) far outweigh the positives from a hawkish ECB. Recession risks open up a narrative change for the EUR which will require markets to adjust forecasts to reflect higher recession probabilities which should weigh on the EUR. GBP FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE The overall bleak economic outlook for the UK, with exceptionally high Inflation and rapidly falling growth have been the biggest negative driver for Sterling. With rising price pressures and falling demand, the risks of stagflation has risen substantially, so much so that the BoE have forecasted a possible recession for the UK economy heading into 2023. At their June meeting the bank followed through with their more moderate approach by hiking 25bsp instead of growing calls of a potential 50bsp hike. The BoE is stuck between a rock and a hard place, right now they have to hike rates to try and fight inflation but by doing so they risk further damaging economic growth as a result. Even though the June statement was dovish, it wasn’t materially more dovish compared to their previous meeting. The price action was a clear warning sign that a lot of negatives has been priced in for Sterling in recent weeks so chasing lower is very risky right now. POSSIBLE BULLISH SURPRISES Stagflation fears are very high for the UK, with probabilities of recession growing by the week. With so much bad news priced in, incoming news risk is asymmetrical, meaning positive surprises in growth data could trigger strong bullish reactions. The UK is facing a huge cost-of-living squeeze, which means lower-than-expected inflation could counterintuitively be a positive driver (as lower CPI means less stagflation risk). The economy needs help right now, which means any help from the fiscal side will be a positive. Any major fiscal support measures to help consumers (subsidies for energy or tax cuts) could trigger bullish reactions for the Pound. Any overly hawkish comments signalling more aggressive policy than what markets are currently pricing in could trigger bullish reactions. POSSIBLE BEARISH SURPRISES Odds that the BoE has limited hikes left has been a negative driver, but so too is risks that inflation forces them to hike even more and further damage GDP. Further stagflation risks from higher gas prices or CPI could trigger bearish reactions. Politicsremain a focus, where any attempts by a new PM in the weeks or months ahead to call for a snap election should cause unnecessary uncertainty and could trigger GBP downside. With UK threats of triggering Article 16 and EU threats to terminate the Brexit deal if they do Brexit is in focus again. For now, markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. Any overly dovish comments signalling less aggressive policy than what markets are currently pricing in could trigger bearish GBP reactions. BIGGER PICTURE The fundamental outlook for the GBP remains fairly bleak right now with the economic prospects and risk of stagflation keeping the currency pressured, alongside expectations that the BoE might not be too far away from pausing their hiking cycle. Anything that exacerbates stagflation fears is expected to weigh on the Pound and anything that alleviates some of that pressure should be positive. Sterling has been looking stretched to the downside, so any new shorts do need to be weary of the risk of some mean reversion, but with the recent bounce at the index level some of the stretched price action might be waning.
by thunderpips
EURGBP can move lower? 🦐EURGBP on the 4h chart broke as expected the weekly resistance and reached the 0.84400 level. The price has then bounced and tested the 0,618 Fibonacci level. How can i approach this scenario? I will wait for the EU market open and if the price will break below i will look for a nice short order according to the Plancton's strategy rules. ––––– Follow the Shrimp 🦐 Keep in mind. 🟣 Purple structure -> Monthly structure. 🔴 Red structure -> Weekly structure. 🔵 Blue structure -> Daily structure. 🟡 Yellow structure -> 4h structure. ⚫️ Black structure -> <4h structure. Here is the Plancton0618 technical analysis , please comment below if you have any question. The ENTRY in the market will be taken only if the condition of the Plancton0618 strategy will trigger.
Short
by InkyGrip
EURGBP - My Trading Plan in a pictureHello TradingView Family / Fellow Traders. This is Richard, as known as theSignalyst. EURGBP is overall bearish trading inside the blue channel. As per my trading style/plan; Here are the two strong zones where I will be looking for high probability setups: I call them War Zones, (highlighted in Purple circles) Zone 1: (around 0.845) This highlighted purple circle is a strong area to look for sell setups as it is the intersection of the green resistance and upper blue trendline. (acting as non-horizontal resistance) Zone 2: (around 0.830) This highlighted purple circle is a strong area to look for buy setups as it is the intersection of the blue support and lower blue trendline. (acting as non-horizontal support) As per my trading style: As EURGBP approaches one of the purple circles, I will be looking for reversal setups (like a double bottom /top pattern, trendline break , and so on...) Always follow your trading plan regarding entry, risk management, and trade management. Good luck! All Strategies Are Good; If Managed Properly! ~Rich
by TheSignalyst
4
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE In recent weeks, the persistently high inflation has seen the ECB take a more hawkish turn with the bank hiking rates by 50bsp at their July meeting. But the bank quelled any hawkish excitement by explaining they are frontloading hikes and not signalling a higher terminal rate with their bigger hike. At their July meeting the bank also failed to ease spread fragmentation concerns with their new Transmission Protection Instrument (TPI) as the eligibility criteria means countries that will need the support the most might have a tough time qualifying. Combined with Italian political concerns, further spread widening looks likely right now. Right now, even though policy and spreads are important, the main story and driver for the EUR is the economic outlook. Recent growth data continues to surprise to the downside at a rapid pace further stoking recession fears for the Eurozone. As long as data surprises lower and spreads remain high the bias for the EUR remains firmly in bearish territory. POSSIBLE BULLISH SURPRISES Geopolitics remains important where any de-escalation or cease fire in Ukraine would open up a lot of EUR upside. Also keep Italian politics in mind where successful attemptsto avoid a snap election could ease spread widening & support the EUR. Stagflation fears are high, with growth expected to slow with inflation still. Recent PMI data has invigorated recession fears, which means any materially better-than-expected growth data (German Ifo & EU GDP data this week) could spark some relief. Spread fragmentation remains a concern, especially with Italian politics and the ECB’s failed attempt to reassure markets about their new TPI tool. Any comments about TPI that convinces markets it can solve fragmentation issues should be supportive for the EUR. Energy concerns are still in focus, which means watching the Nord Stream 1 flows, if Russia increases gas flows to more regular levels it should ease some energy supply issues. POSSIBLE BEARISH SURPRISES Geopolitics remain in focus, any escalation in the Ukraine war that risks including NATO would be big negative risks. Also keep Italian politics in mind, where any failed attempts to avoid a snap election should add further pressure on the EUR. Growth concerns continue to weigh on the EUR and means any major negative surprises in incoming growth data (German Ifo & EU GDP data this week) could trigger further downside. Spread fragmentation remains in focus, and if the ECB fails to act with big jolts higher in the BTP/ Bund spread it could trigger bearish reactions in the EUR. We've seen a chunky repricing in hike expectations over the past three weeks, and any further lower repricing is expected to weigh on the EUR. Energy concerns are still in focus, which means watching the Nord Stream 1 flows, if Russia decreases gas flows again it should ease some energy supply issues. BIGGER PICTURE The fundamental outlook remains bearish for the EUR with recent leading indicators pointing to a much faster economic slowdown than markets had previously expected. The current bearish drivers (geopolitics, stagflation, spread fragmentation, energy supply concerns) far outweigh the positives from a hawkish ECB. Recession risks open up a narrative change for the EUR which will require markets to change their forecasts to reflect higher recession probabilities which should weigh on the EUR. GBP FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE The overall bleak economic outlook for the UK, with exceptionally high Inflation and rapidly falling growth have been the biggest negative driver for Sterling. With rising price pressures and falling demand, the risks of stagflation has risen substantially, so much so that the BoE have forecasted a possible recession for the UK economy heading into 2023. At their June meeting the bank followed through with their more moderate approach by hiking 25bsp instead of growing calls of a potential 50bsp hike. The BoE is stuck between a rock and a hard place, right now they have to hike rates to try and fight inflation but by doing so they risk further damaging economic growth as a result. Even though the June statement was dovish, it wasn’t materially more dovish compared to their previous meeting. The price action was a clear warning sign that a lot of negatives has been priced in for Sterling in recent weeks so chasing lower is very risky right now. POSSIBLE BULLISH SURPRISES Stagflation fears are very high for the UK, with probabilities of recession growing by the week. With so much bad news priced in, incoming news risk is asymmetrical, meaning positive surprises in growth data could trigger strong bullish reactions. The UK is facing a huge cost-of-living squeeze, which means lower-than-expected inflation could counterintuitively be a positive driver (as lower CPI means less stagflation risk). The economy needs help right now, which means any help from the fiscal side will be a positive. Any major fiscal support measures to help consumers (subsidies for energy or tax cuts) could trigger bullish reactions for the Pound. Any overly hawkish comments signalling more aggressive policy than what markets are currently pricing in could trigger bullish reactions. POSSIBLE BEARISH SURPRISES Odds that the BoE has limited hikes left has been a negative driver, but so too is risks that inflation forces them to hike even more and further damage GDP. Further stagflation risks from higher gas prices or CPI could trigger bearish reactions. Politicsremain a focus, where any attempts by a new PM in the weeks or months ahead to call for a snap election should cause unnecessary uncertainty and could trigger GBP downside. With UK threats of triggering Article 16 and EU threats to terminate the Brexit deal if they do Brexit is in focus again. For now, markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. Any overly dovish comments signalling less aggressive policy than what markets are currently pricing in (see Rate Tracker for STIR expectations) could trigger bearish GBP reactions. BIGGER PICTURE The fundamental outlook for the GBP remains fairly bleak right now with the economic prospects and risk of stagflation keeping the currency pressured, alongside expectations that the BoE might not be too far away from pausing their hiking cycle. Anything that exacerbates stagflation fears is expected to weigh on the Pound and anything that alleviates some of that pressure should be positive. Sterling has been looking stretched to the downside, so any new shorts do need to be weary of the risk of some mean reversion, and also means the risk to reward favours short-term upside on strong bullish catalysts.
by thunderpips
1
Bears are in control on EURGBPEURGBP - Intraday - We look to Sell at 0.8440 (stop at 0.8475) Although the bears are in control, the stalling negative momentum indicates a turnaround is possible. A Doji style candle has been posted from the base. A higher correction is expected. The bias is still for higher levels and we look for any dips to be limited. We therefore, prefer to fade into the rally with a tight stop in anticipation of a move back lower. Our profit targets will be 0.8345 and 0.8325 Resistance: 0.8460 / 0.8600 / 0.8720 Support: 0.8325 / 0.8200 / 0.8060 Risk Disclaimer The trade ideas beyond this page are for informational purposes only and do not constitute investment advice or a solicitation to trade. This information is provided by Signal Centre, a third-party unaffiliated with OANDA, and is intended for general circulation only. OANDA does not guarantee the accuracy of this information and assumes no responsibilities for the information provided by the third party. The information does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. You accept that you assume all risks in independently viewing the contents and selecting a chosen strategy. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, Oanda Asia Pacific Pte Ltd (“OAP“) accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore customers should contact OAP at 6579 8289 for matters arising from, or in connection with, the information/research distributed.'
Short
by OANDA
Fading rallies in EURGBPEURGBP - Intraday - We look to Sell at 0.8475 (stop at 0.8505) Although the bears are in control, the stalling negative momentum indicates a turnaround is possible. A higher correction is expected. The bias is still for lower levels and we look for any gains to be limited. We therefore, prefer to fade into the rally with a tight stop in anticipation of a move back lower. Our profit targets will be 0.8390 and 0.8325 Resistance: 0.8460 / 0.8600 / 0.8720 Support: 0.8325 / 0.8200 / 0.8060 Risk Disclaimer The trade ideas beyond this page are for informational purposes only and do not constitute investment advice or a solicitation to trade. This information is provided by Signal Centre, a third-party unaffiliated with OANDA, and is intended for general circulation only. OANDA does not guarantee the accuracy of this information and assumes no responsibilities for the information provided by the third party. The information does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit. You accept that you assume all risks in independently viewing the contents and selecting a chosen strategy. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, Oanda Asia Pacific Pte Ltd (“OAP“) accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore customers should contact OAP at 6579 8289 for matters arising from, or in connection with, the information/research distributed.'
Short
by OANDA
1
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE In recent weeks, the persistently high inflation has seen the ECB take a more hawkish turn with the bank hiking rates by 50bsp at their July meeting. But the bank quelled any hawkish excitement by explaining they are frontloading hikes and not signalling a higher terminal rate with their bigger hike. At their July meeting the bank also failed to ease spread fragmentation concerns with their new Transmission Protection Instrument (TPI) as the eligibility criteria means countries that will need the support the most might have a tough time qualifying. Combined with Italian political concerns, further spread widening looks likely right now. Right now, even though policy and spreads are important, the main story and driver for the EUR is the economic outlook. Recent growth data continues to surprise to the downside at a rapid pace further stoking recession fears for the Eurozone. As long as data surprises lower and spreads remain high the bias for the EUR remains firmly in bearish territory. POSSIBLE BULLISH SURPRISES Geopolitics remains important where any de-escalation or cease fire in Ukraine would open up a lot of EUR upside. Also keep Italian politics in mind where successful attemptsto avoid a snap election could ease spread widening & support the EUR. Stagflation fears are high, with growth expected to slow with inflation still. Recent PMI data has invigorated recession fears, which means any materially better-than-expected growth data (German Ifo & EU GDP data this week) could spark some relief. Spread fragmentation remains a concern, especially with Italian politics and the ECB’s failed attempt to reassure markets about their new TPI tool. Any comments about TPI that convinces markets it can solve fragmentation issues should be supportive for the EUR. Energy concerns are still in focus, which means watching the Nord Stream 1 flows, if Russia increases gas flows to more regular levels it should ease some energy supply issues. POSSIBLE BEARISH SURPRISES Geopolitics remain in focus, any escalation in the Ukraine war that risks including NATO would be big negative risks. Also keep Italian politics in mind, where any failed attempts to avoid a snap election should add further pressure on the EUR. Growth concerns continue to weigh on the EUR and means any major negative surprises in incoming growth data (German Ifo & EU GDP data this week) could trigger further downside. Spread fragmentation remains in focus, and if the ECB fails to act with big jolts higher in the BTP/ Bund spread it could trigger bearish reactions in the EUR. We've seen a chunky repricing in hike expectations over the past three weeks, and any further lower repricing is expected to weigh on the EUR. Energy concerns are still in focus, which means watching the Nord Stream 1 flows, if Russia decreases gas flows again it should ease some energy supply issues. BIGGER PICTURE The fundamental outlook remains bearish for the EUR with recent leading indicators pointing to a much faster economic slowdown than markets had previously expected. The current bearish drivers (geopolitics, stagflation, spread fragmentation, energy supply concerns) far outweigh the positives from a hawkish ECB. Recession risks open up a narrative change for the EUR which will require markets to change their forecasts to reflect higher recession probabilities which should weigh on the EUR. GBP FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE The overall bleak economic outlook for the UK, with exceptionally high Inflation and rapidly falling growth have been the biggest negative driver for Sterling. With rising price pressures and falling demand, the risks of stagflation has risen substantially, so much so that the BoE have forecasted a possible recession for the UK economy heading into 2023. At their June meeting the bank followed through with their more moderate approach by hiking 25bsp instead of growing calls of a potential 50bsp hike. The BoE is stuck between a rock and a hard place, right now they have to hike rates to try and fight inflation but by doing so they risk further damaging economic growth as a result. Even though the June statement was dovish, it wasn’t materially more dovish compared to their previous meeting. The price action was a clear warning sign that a lot of negatives has been priced in for Sterling in recent weeks so chasing lower is very risky right now. POSSIBLE BULLISH SURPRISES Stagflation fears are very high for the UK, with probabilities of recession growing by the week. With so much bad news priced in, incoming news risk is asymmetrical, meaning positive surprises in growth data could trigger strong bullish reactions. The UK is facing a huge cost-of-living squeeze, which means lower-than-expected inflation could counterintuitively be a positive driver (as lower CPI means less stagflation risk). The economy needs help right now, which means any help from the fiscal side will be a positive. Any major fiscal support measures to help consumers (subsidies for energy or tax cuts) could trigger bullish reactions for the Pound. Any overly hawkish comments signalling more aggressive policy than what markets are currently pricing in could trigger bullish reactions. POSSIBLE BEARISH SURPRISES Odds that the BoE has limited hikes left has been a negative driver, but so too is risks that inflation forces them to hike even more and further damage GDP. Further stagflation risks from higher gas prices or CPI could trigger bearish reactions. Politicsremain a focus, where any attempts by a new PM in the weeks or months ahead to call for a snap election should cause unnecessary uncertainty and could trigger GBP downside. With UK threats of triggering Article 16 and EU threats to terminate the Brexit deal if they do Brexit is in focus again. For now, markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. Any overly dovish comments signalling less aggressive policy than what markets are currently pricing in (see Rate Tracker for STIR expectations) could trigger bearish GBP reactions. BIGGER PICTURE The fundamental outlook for the GBP remains fairly bleak right now with the economic prospects and risk of stagflation keeping the currency pressured, alongside expectations that the BoE might not be too far away from pausing their hiking cycle. Anything that exacerbates stagflation fears is expected to weigh on the Pound and anything that alleviates some of that pressure should be positive. Sterling has been looking stretched to the downside, so any new shorts do need to be weary of the risk of some mean reversion, and also means the risk to reward favours short-term upside on strong bullish catalysts.
by thunderpips