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💡Don't miss the great buy opportunity in EURGBP Trading suggestion: ". There is a possibility of temporary retracement to the suggested support line (0.8442). . if so, traders can set orders based on Price Action and expect to reach short-term targets." Technical analysis: . EURGBP is in a range bound, and the beginning of an uptrend is expected. . The price is above the 21-Day WEMA, which acts as a dynamic support. . The RSI is at 65. Take Profits: TP1= @ 0.8551 TP2= @ 0.8599 TP3= @ 0.8654 TP4= @ 0.8719 TP5= @ 0.8791 SL= Break below S2 ❤️ If you find this helpful and want more FREE forecasts in TradingView . . . . . Please show your support back, . . . . . . . . Hit the 👍 LIKE button, . . . . . . . . . . Drop some feedback below in the comment! ❤️ Your support is very much 🙏 appreciated! ❤️ 💎 Want us to help you become a better Forex / Crypto trader ? Now, It's your turn ! Be sure to leave a comment; let us know how you see this opportunity and forecast. Trade well, ❤️ ForecastCity English Support Team ❤️
Long
by ForecastCity
5
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy The ECB used the April meeting as a place holder meeting for the most part by not announcing any additional policy tweaks. The plans to phase out the APP into Q3 remained intact by reducing purchases from 40bln to 30bln in May and then down to 20bln in June. Markets were leaning towards a slightly more hawkish take from the bank (given recent inflation pressures), but the lack of conviction to remove the conditionality regarding the APP removal was seen as dovish. President Lagarde added to this dovish tone by explaining that Q3 has three months and IF the bank stops the APP, it could happen July, August or September. This was an important statement as the difference between a July and September end could mean the difference between a Q3 or Q4 rate hike. The president also added to the dovish tone by stressing that risks for the economic outlook are tilted to the downside and have recently intensified with geopolitical and virus-related challenges. When asked about policy normalization, the president made a strange comment by saying it is premature to think about monpol normalisation. As the bank is currently embarking on normalization this comment seemed out of place and reaffirmed the overall dovish take from the meeting. There were the usual sources releases after the presser which said policymakers see a July hike as still possible after Thursday's meeting, which provided some reprieve. With inflation >7% and growth slowing, the June meeting which accompanies staff economic projections will be critical for markets to solidify whether expectations of 1 or 2 hikes this year is correct or not. 2. Economic & Health Developments Growth differentials still favour the US over EU capital flows, but differentials have turned positive against the UK. Given growing stagflation fears the ECB is in a tough spot, being forced to normalize policy to try and combat inflation but could as a result damage growth. Ongoing EU fiscal discussions to possibly allow ‘green bonds’ NOT to count against budget deficits remains in focus, alongside debt issuance for energy purchases. If approved, it will offer a flood of fiscal support which would be positive for the EUR and EU equities. Geopolitics The EUR pushed lower aggressively after initial geopolitical scares but have been trying to carve out a base. Proximity to the war and the impact of sanctions remains a risk if the situation deteriorates. With lots of negatives already priced, chasing lows on bad news is not as attractive as chasing the EUR higher on good news. 3. CFTC Analysis Very bearish signal from recent positioning update as all three major categories saw sizeable net-short weekly changes. The price action throughout the week has reflected this change in sentiment quite well. 4. The Week Ahead The data is extremely light for the Eurozone next week with no major data events to take note of apart from final PMI data (which is unlikely to create a lot of volatility ). Thus, the biggest drivers for the EUR in the week ahead will be ECB speak, Geopolitics and of course the outcome of the FOMC. For the FOMC, the reaction in the USD will largely impact G10 FX across the board, and since the DXY is close to 60% weighted to the EUR that means any big USD moves will be important to watch for the EUR. For ECB speak, markets will be looking for any further comments about the possibility of a July rate hike by the ECB (STIR markets pricing in a 94% probability of a July hike already). Any comments, especially from dovish ECB members could see some upside, but with a hike almost fully priced there might not be much more miles left in that tank. With a hike almost fully priced, the biggest risk from ECB speak in the week ahead is comments that sees markets pricing out a hike for July and could see some downside if that’s the case. For Geopolitics, the Eurogroup meetings will be watched closely for any further news on a potential oil embargo (with Germany reportedly warming up to the idea this week). It’s important to see the details of any embargo to assess the likely impact to the EUR. For example, will it be an immediate stop or gradual (if gradual how long), will it be specific amounts or a more phased approach, have the EZ already sourced alternative supply or not, what type of premium are they expected to pay if they have sourced from other suppliers. All these details will be necessary to be able to quantify how negative any embargo will be and how that will likely then impact the EUR. GBP FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy In March the BoE hiked rates by 25bsp as expected but delivered a bearish hike with BoE’s Cunliffe dissenting by voting to leave rates unchanged. This was a stark change from February where 4 members voted for a 50bsp hike. Cunliffe noted the negative impacts of higher commodity prices on real household incomes and economic activity as the main reason for his dissention, while remaining members thought a 25bsp hike was appropriate given the tight labour market and risks of second round effects. Even though inflation forecasts were upgraded to 8% in Q2 (previous 7.25%), the negative view that GDP was expected to slow to subdued rates showed growing concern of stagflation. The most bearish element of the statement was a change in language regarding incoming rates where the bank said they judge that some further modest tightening MIGHT be appropriate where previous guidance said more tightening was ‘LIKELY TO BE’ appropriate (a clear push against overly aggressive rate expectations). They further pushed back by noting the current implied rate path would see inflation would be below target in 3 years’ time, in other words saying they won’t hike as much, and confirms our estimates that policy reached peak hawkishness in February. The 100% odds of a 25bsp in May drifted to just above 80% on Friday, and markets will pay close attention to incoming BoE speak, where further push back against rates could be enough to see markets pricing out some of the >5 hikes still priced for 2022. As a result of the clear dovish tilt, we have adjusted our assessment of the bank’s policy stance to NEUTRAL. 2. Economic & Health Developments With inflation the main reason for the BoE’s recent rate hikes, there is a concern that the UK economy faces stagflation risk, as price pressures stay sticky while growth decelerates. That also means that current market expectations for rates continues to look too aggressive even after the BoE’s recent push back. This means downside risks for GBP if growth data push lower and/or the BoE continue to push their recent dovish tone. 3. Political Developments Political uncertainty is usually GBP negative, so the PM’s future remains a risk. If distrust grows question remains on whether a no-confidence vote can happen (if so, short-term downside is likely), and whether he can survive the vote (a win should be GBP positive and a loss GBP negative). The Northern Ireland protocol remains a focus, with previous UK threats to trigger Article 16 and EU threats to terminate the Brexit deal if they do. Markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. 4. CFTC Analysis Very bearish signal from all three participant categories with the aggregate positioning (non-commercials, leveraged funds and asset managers) pushing below 1 standard dev from the 15-year mean. It’s important to note that this sentiment was clearly reflected given the big drop in Sterling this week. 5. The Week Ahead For Sterling in the week ahead it’ll be all eyes on the upcoming Bank of England meeting. Recall at the last meeting that we saw quite a dramatic change in sentiment among the MPC with only 8 voting for a hike and 1 dissenter voting to leave rates unchanged. This was a big change from the meeting before that where all 9 voted for a hike and 4 voted for a 50bsp hike. A 25bsp hike is fully priced in for the May meeting (as well as an additional 5 by year end after that), so markets will be keenly watching the vote split to get a clue whether the overall sentiment for hikes among MPC members are changing (will anyone join Cunliffe to dissent this time). There are reasons to believe that more MPC members could be leaning to the dovish side as recent growth data has deteriorated much more and faster than expected. Especially with recent commentary from Gov Bailey cautioning that they are walking on a tightrope between trying to fight high inflation whilst trying to avoid a recession. That means with a 25bsp hike 100% priced, the focus will be on any signals the bank provides with regard to the rate path going forward (whether they push back against the overly aggressive hike expectations or not). The balance sheet will also be in focus as the bank’s has previously suggested that they will look to actively start selling Gilts once the cash rate reaches 1.0%. By following through with a 25bsp hike next week will put them at 1.0% so any announcement of sales or of a path forward will be important.
by thunderpips
2
EURGBP - Major Reversal Incoming 🚀EURGBP is ranging perfectly between a parallel descending channel. The nice thing about this pattern is that each wave has an ABC corrective pattern which has been highlighted in ABC. We can see that we're currently on the 5th and final wave, which is the E wave. After this wave, we're expecting a major bullish reversal. In the meantime, we can still trade towards the buy zone by looking for lower timeframe corrections. However, the bigger swing trade is the BUY from the bottom. Trade Idea: - Watch for the completion of E wave either at the double bottom or channel support - once price action appears, enter with stops below price rejection Targets: - Channel Resistance (300pips) - Start of the channel (600pips) Let us know what you think. As always, trade safe!
by WicktatorFX
11
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy The ECB used the April meeting as a place holder meeting for the most part by not announcing any additional policy tweaks. The plans to phase out the APP into Q3 remained intact by reducing purchases from 40bln to 30bln in May and then down to 20bln in June. Markets were leaning towards a slightly more hawkish take from the bank (given recent inflation pressures), but the lack of conviction to remove the conditionality regarding the APP removal was seen as dovish. President Lagarde added to this dovish tone by explaining that Q3 has three months and IF the bank stops the APP, it could happen July, August or September. This was an important statement as the difference between a July and September end could mean the difference between a Q3 or Q4 rate hike. The president also added to the dovish tone by stressing that risks for the economic outlook are tilted to the downside and have recently intensified with geopolitical and virus-related challenges. When asked about policy normalization, the president made a strange comment by saying it is premature to think about monpol normalisation. As the bank is currently embarking on normalization this comment seemed out of place and reaffirmed the overall dovish take from the meeting. There were the usual sources releases after the presser which said policymakers see a July hike as still possible after Thursday's meeting, which provided some reprieve. With inflation >7% and growth slowing, the June meeting which accompanies staff economic projections will be critical for markets to solidify whether expectations of 1 or 2 hikes this year is correct or not. 2. Economic & Health Developments Growth differentials still favour the US over EU capital flows, but differentials have turned positive against the UK. Given growing stagflation fears the ECB is in a tough spot, being forced to normalize policy to try and combat inflation but could as a result damage growth. Ongoing EU fiscal discussions to possibly allow ‘green bonds’ NOT to count against budget deficits remains in focus, alongside debt issuance for energy purchases. If approved, it will offer a flood of fiscal support which would be positive for the EUR and EU equities. Geopolitics The EUR pushed lower aggressively after initial geopolitical scares but have been trying to carve out a base. Proximity to the war and the impact of sanctions remains a risk if the situation deteriorates. With lots of negatives already priced, chasing lows on bad news is not as attractive as chasing the EUR higher on good news. 3. CFTC Analysis After chunky increase in long exposure with the previous CFTC report, Friday’s data showed the exact opposite with a chunky drop for Large Specs and Leveraged Funds. Even though aggregate positioning is close to 1 standard deviation above the mean, the price action in recent weeks does not reflect that view right now. 4. The Week Ahead One of the weekend risks for the EUR was the French elections, which ended up as expected with a victory for current President Macron. This is a positive for the EUR, but since this was the expected outcome and since the EUR got a bit of a shot in the arm from last week’s hawkish ECB remarks, we are note expecting anything special from the French election outcome. The main econ highlights this week will be EU Flash HICP data coming up on Friday. After last month’s big jump in YY HICP from 5.9% to 7.4% the upcoming print is expected to be less dramatic with consensus looking for a move to 7.5%. However, some firms suggest that food prices and utility costs (which is seeing in renegotiations) still puts upside risks to the print. After last week’s hawkish ECB comments, the HICP will be watched closely as a miss could ease up some of last week’s rates pressures, while a solid beat should just reinforce expectations of a possibly 25bsp hike as early as July. Geopolitics will also be in focus, where Finland and Sweden’s attempts to join NATO could spark aggressive reactions from Russia (any threats from Russia could see markets pricing in a bigger risk premium for the EUR). We also need to keep energy in mind where the possibility of energy embargos on Russian oil and gas will be key to watch as well. GBP FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy In March the BoE hiked rates by 25bsp as expected but delivered a bearish hike with BoE’s Cunliffe dissenting by voting to leave rates unchanged. This was a stark change from February where 4 members voted for a 50bsp hike. Cunliffe noted the negative impacts of higher commodity prices on real household incomes and economic activity as the main reason for his dissention, while remaining members thought a 25bsp hike was appropriate given the tight labour market and risks of second round effects. Even though inflation forecasts were upgraded to 8% in Q2 (previous 7.25%), the negative view that GDP was expected to slow to subdued rates showed growing concern of stagflation. The most bearish element of the statement was a change in language regarding incoming rates where the bank said they judge that some further modest tightening MIGHT be appropriate where previous guidance said more tightening was ‘LIKELY TO BE’ appropriate (a clear push against overly aggressive rate expectations). They further pushed back by noting the current implied rate path would see inflation would be below target in 3 years’ time, in other words saying they won’t hike as much, and confirms our estimates that policy reached peak hawkishness in February. The 100% odds of a 25bsp in May drifted to just above 80% on Friday, and markets will pay close attention to incoming BoE speak, where further push back against rates could be enough to see markets pricing out some of the >5 hikes still priced for 2022. As a result of the clear dovish tilt, we have adjusted our assessment of the bank’s policy stance to NEUTRAL. 2. Economic & Health Developments With inflation the main reason for the BoE’s recent rate hikes, there is a concern that the UK economy faces stagflation risk, as price pressures stay sticky while growth decelerates. That also means that current market expectations for rates continues to look too aggressive even after the BoE’s recent push back. This means downside risks for GBP if growth data push lower and/or the BoE continue to push their recent dovish tone. 3. Political Developments Political uncertainty is usually GBP negative, so the PM’s future remains a risk. If distrust grows question remains on whether a no-confidence vote can happen (if so, short-term downside is likely), and whether he can survive the vote (a win should be GBP positive and a loss GBP negative). The Northern Ireland protocol remains a focus, with previous UK threats to trigger Article 16 and EU threats to terminate the Brexit deal if they do. Markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. 4. CFTC Analysis CFTC data a mostly bearish signal last week as Large Specs increased shorts and Leveraged Funds decreased longs (both by a big amount). Our preference remains to look for GBP shorts against the EUR in the med-term , and after the push lower in EURGBP post the previous ECB meeting the coast looks clearer than a week ago. 5. The Week Ahead Despite hawkish comments from BoE’s Mann last week (which tried to place more emphasis on the inflation side of the economy), the dismal Consumer Confidence, Retail Sales and S&P Global Flash PMI’s brought the slowing growth concerns right back into focus (and rightly so). The timing of these prints was fairly bad for the GBP as this week has a very light calendar schedule, which means there won’t be any major growth data points that could ease some of Friday’s concerns.
by thunderpips
2
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy The ECB used the April meeting as a place holder meeting for the most part by not announcing any additional policy tweaks. The plans to phase out the APP into Q3 remained intact by reducing purchases from 40bln to 30bln in May and then down to 20bln in June. Markets were leaning towards a slightly more hawkish take from the bank (given recent inflation pressures), but the lack of conviction to remove the conditionality regarding the APP removal was seen as dovish. President Lagarde added to this dovish tone by explaining that Q3 has three months and IF the bank stops the APP, it could happen July, August or September. This was an important statement as the difference between a July and September end could mean the difference between a Q3 or Q4 rate hike. The president also added to the dovish tone by stressing that risks for the economic outlook are tilted to the downside and have recently intensified with geopolitical and virus-related challenges. When asked about policy normalization, the president made a strange comment by saying it is premature to think about monpol normalisation. As the bank is currently embarking on normalization this comment seemed out of place and reaffirmed the overall dovish take from the meeting. There were the usual sources releases after the presser which said policymakers see a July hike as still possible after Thursday's meeting, which provided some reprieve. With inflation >7% and growth slowing, the June meeting which accompanies staff economic projections will be critical for markets to solidify whether expectations of 1 or 2 hikes this year is correct or not. 2. Economic & Health Developments Growth differentials still favour the US over EU capital flows, but differentials have turned positive against the UK. Given growing stagflation fears the ECB is in a tough spot, being forced to normalize policy to try and combat inflation but could as a result damage growth. Ongoing EU fiscal discussions to possibly allow ‘green bonds’ NOT to count against budget deficits remains in focus, alongside debt issuance for energy purchases. If approved, it will offer a flood of fiscal support which would be positive for the EUR and EU equities. Geopolitics The EUR pushed lower aggressively after initial geopolitical scares but have been trying to carve out a base. Proximity to the war and the impact of sanctions remains a risk if the situation deteriorates. With lots of negatives already priced, chasing lows on bad news is not as attractive as chasing the EUR higher on good news. 3. CFTC Analysis After chunky increase in long exposure with the previous CFTC report, Friday’s data showed the exact opposite with a chunky drop for Large Specs and Leveraged Funds. Even though aggregate positioning is close to 1 standard deviation above the mean, the price action in recent weeks does not reflect that view right now. 4. The Week Ahead One of the weekend risks for the EUR was the French elections, which ended up as expected with a victory for current President Macron. This is a positive for the EUR, but since this was the expected outcome and since the EUR got a bit of a shot in the arm from last week’s hawkish ECB remarks, we are note expecting anything special from the French election outcome. The main econ highlights this week will be EU Flash HICP data coming up on Friday. After last month’s big jump in YY HICP from 5.9% to 7.4% the upcoming print is expected to be less dramatic with consensus looking for a move to 7.5%. However, some firms suggest that food prices and utility costs (which is seeing in renegotiations) still puts upside risks to the print. After last week’s hawkish ECB comments, the HICP will be watched closely as a miss could ease up some of last week’s rates pressures, while a solid beat should just reinforce expectations of a possibly 25bsp hike as early as July. Geopolitics will also be in focus, where Finland and Sweden’s attempts to join NATO could spark aggressive reactions from Russia (any threats from Russia could see markets pricing in a bigger risk premium for the EUR). We also need to keep energy in mind where the possibility of energy embargos on Russian oil and gas will be key to watch as well. GBP FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy In March the BoE hiked rates by 25bsp as expected but delivered a bearish hike with BoE’s Cunliffe dissenting by voting to leave rates unchanged. This was a stark change from February where 4 members voted for a 50bsp hike. Cunliffe noted the negative impacts of higher commodity prices on real household incomes and economic activity as the main reason for his dissention, while remaining members thought a 25bsp hike was appropriate given the tight labour market and risks of second round effects. Even though inflation forecasts were upgraded to 8% in Q2 (previous 7.25%), the negative view that GDP was expected to slow to subdued rates showed growing concern of stagflation. The most bearish element of the statement was a change in language regarding incoming rates where the bank said they judge that some further modest tightening MIGHT be appropriate where previous guidance said more tightening was ‘LIKELY TO BE’ appropriate (a clear push against overly aggressive rate expectations). They further pushed back by noting the current implied rate path would see inflation would be below target in 3 years’ time, in other words saying they won’t hike as much, and confirms our estimates that policy reached peak hawkishness in February. The 100% odds of a 25bsp in May drifted to just above 80% on Friday, and markets will pay close attention to incoming BoE speak, where further push back against rates could be enough to see markets pricing out some of the >5 hikes still priced for 2022. As a result of the clear dovish tilt, we have adjusted our assessment of the bank’s policy stance to NEUTRAL. 2. Economic & Health Developments With inflation the main reason for the BoE’s recent rate hikes, there is a concern that the UK economy faces stagflation risk, as price pressures stay sticky while growth decelerates. That also means that current market expectations for rates continues to look too aggressive even after the BoE’s recent push back. This means downside risks for GBP if growth data push lower and/or the BoE continue to push their recent dovish tone. 3. Political Developments Political uncertainty is usually GBP negative, so the PM’s future remains a risk. If distrust grows question remains on whether a no-confidence vote can happen (if so, short-term downside is likely), and whether he can survive the vote (a win should be GBP positive and a loss GBP negative). The Northern Ireland protocol remains a focus, with previous UK threats to trigger Article 16 and EU threats to terminate the Brexit deal if they do. Markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. 4. CFTC Analysis CFTC data a mostly bearish signal last week as Large Specs increased shorts and Leveraged Funds decreased longs (both by a big amount). Our preference remains to look for GBP shorts against the EUR in the med-term, and after the push lower in EURGBP post the previous ECB meeting the coast looks clearer than a week ago. 5. The Week Ahead Despite hawkish comments from BoE’s Mann last week (which tried to place more emphasis on the inflation side of the economy), the dismal Consumer Confidence, Retail Sales and S&P Global Flash PMI’s brought the slowing growth concerns right back into focus (and rightly so). The timing of these prints was fairly bad for the GBP as this week has a very light calendar schedule, which means there won’t be any major growth data points that could ease some of Friday’s concerns.
by thunderpips
EURGBP on a falling wedge? 🦐EURGBP on the 4h chart is trading between 2 narrowing trendline. The price has now reached a support area at the 0.786 Fibonacci level and we can expect some retracement to the upside. How can i approach this scenario? I will wait for the EU market open and if the price will break above the 0.618 Fibonacci level i will look for a nice long order according to 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
12
Keep Shorting the EURGBP, A Gap That Must Be FilledEURGBP has reached a new 5-year low last month,dropping to the area of 0.8200. This gap hasn't filled yet, and now the price is on its way to test the 0.8200 level again after completing its retracement from the 0.8500 level. The price is currently moving within a bearish flag structure and has retested the previous support level but was rejected. From here, perhaps we can see the price creating a head and shoulder pattern and then breaking the neckline to continue its downtrend toward the 0.8200 area. Our task now is to wait and see a reversal pattern being formed and a breakout. After the breakout with candle closing below the neckline area of 0.8283 , we will place our sell limit order at the neckine of the pattern to capture the retest. SL is placed at about 5 pips above the third shoulder. A good aspect of EURGBP is that a gap tends to get filled more often than other volatile currency pairs and its trend is persistent. We will update this post after the price moves close to our entry criteria.
Short
by NicoBeau_Capital
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy The ECB used the April meeting as a place holder meeting for the most part by not announcing any additional policy tweaks. The plans to phase out the APP into Q3 remained intact by reducing purchases from 40bln to 30bln in May and then down to 20bln in June. Markets were leaning towards a slightly more hawkish take from the bank (given recent inflation pressures), but the lack of conviction to remove the conditionality regarding the APP removal was seen as dovish. President Lagarde added to this dovish tone by explaining that Q3 has three months and IF the bank stops the APP, it could happen July, August or September. This was an important statement as the difference between a July and September end could mean the difference between a Q3 or Q4 rate hike. The president also added to the dovish tone by stressing that risks for the economic outlook are tilted to the downside and have recently intensified with geopolitical and virus-related challenges. When asked about policy normalization, the president made a strange comment by saying it is premature to think about monpol normalisation. As the bank is currently embarking on normalization this comment seemed out of place and reaffirmed the overall dovish take from the meeting. There were the usual sources releases after the presser which said policymakers see a July hike as still possible after Thursday's meeting, which provided some reprieve. With inflation >7% and growth slowing, the June meeting which accompanies staff economic projections will be critical for markets to solidify whether expectations of 1 or 2 hikes this year is correct or not. 2. Economic & Health Developments Growth differentials still favour the US over EU capital flows, but differentials have turned positive against the UK. Given growing stagflation fears the ECB is in a tough spot, being forced to normalize policy to try and combat inflation but could as a result damage growth. Ongoing EU fiscal discussions to possibly allow ‘green bonds’ NOT to count against budget deficits remains in focus, alongside debt issuance for energy purchases. If approved, it will offer a flood of fiscal support which would be positive for the EUR and EU equities. Geopolitics The EUR pushed lower aggressively after initial geopolitical scares but have been trying to carve out a base. Proximity to the war and the impact of sanctions remains a risk if the situation deteriorates. With lots of negatives already priced, chasing lows on bad news is not as attractive as chasing the EUR higher on good news. 3. CFTC Analysis Quite a chunky increase in long exposure from Large Specs and Leveraged Funds while Asset Managers reduced long exposure. With aggregate positioning close to 1 standard deviation above the mean positioning might look stretched, but relative to where we were coming from positioning is more bullish than bearish right now. 4. The Week Ahead Even though the EUR saw some downside after the ECB last week, there was not much change in STIR pricing for 2 hikes this year. Thus, we would still prefer chasing the EUR higher on good news as opposed to chasing it lower on bad news with a lot of bad news already priced. That means in the week ahead the main events to watch would be the incoming S&P Global Flash PMI data, ECB speak and geopolitical developments. With the current stagflation fears any bigger-than-expected bounce or miss in the data will be important for short-term volatility, but it might not be enough to change the market’s mind about the ECB until we get the June policy meeting out of the way. Thus, even though PMIs could provide short-term directional moves it might not be enough to create sustainable moves going into the June meeting. Geopolitics will also be in focus, where Finland and Sweden’s attempts to join NATO could spark aggressive reactions from Russia (any threats from Russia could see markets pricing in a bigger risk premium for the EUR). We also need to keep energy in mind where the possibility of energy embargos on Russian oil and gas will be key to watch as well. GBP FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy In March the BoE hiked rates by 25bsp as expected but delivered a bearish hike with BoE’s Cunliffe dissenting by voting to leave rates unchanged. This was a stark change from February where 4 members voted for a 50bsp hike. Cunliffe noted the negative impacts of higher commodity prices on real household incomes and economic activity as the main reason for his dissention, while remaining members thought a 25bsp hike was appropriate given the tight labour market and risks of second round effects. Even though inflation forecasts were upgraded to 8% in Q2 (previous 7.25%), the negative view that GDP was expected to slow to subdued rates showed growing concern of stagflation. The most bearish element of the statement was a change in language regarding incoming rates where the bank said they judge that some further modest tightening MIGHT be appropriate where previous guidance said more tightening was ‘LIKELY TO BE’ appropriate (a clear push against overly aggressive rate expectations). They further pushed back by noting the current implied rate path would see inflation would be below target in 3 years’ time, in other words saying they won’t hike as much, and confirms our estimates that policy reached peak hawkishness in February. The 100% odds of a 25bsp in May drifted to just above 80% on Friday, and markets will pay close attention to incoming BoE speak, where further push back against rates could be enough to see markets pricing out some of the >5 hikes still priced for 2022. As a result of the clear dovish tilt, we have adjusted our assessment of the bank’s policy stance to NEUTRAL. 2. Economic & Health Developments With inflation the main reason for the BoE’s recent rate hikes, there is a concern that the UK economy faces stagflation risk, as price pressures stay sticky while growth decelerates. That also means that current market expectations for rates continues to look too aggressive even after the BoE’s recent push back. This means downside risks for GBP if growth data push lower and/or the BoE continue to push their recent dovish tone. 3. Political Developments Political uncertainty is usually GBP negative, so the PM’s future remains a risk. If distrust grows question remains on whether a no-confidence vote can happen (if so, short-term downside is likely), and whether he can survive the vote (a win should be GBP positive and a loss GBP negative). The Northern Ireland protocol remains a focus, with previous UK threats to trigger Article 16 and EU threats to terminate the Brexit deal if they do. Markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. 4. CFTC Analysis CFTC data had a bearish signal last week as all three participant categories saw increased short exposure for Sterling. Price action and positioning has been looking a bit stretched with Asset Managers and Large Spec netshort reaching bottom 20 percentile levels. Our preference remains to look for GBP shorts. 5. The Week Ahead Retail Sales and S&P Global Flash PMI’s will be the main data highlights for Sterling in the week ahead. The growing fears of stagflation in the UK means the incoming growth data will be very important. Thus, what markets will want to see from the incoming data is whether there are noticeable signs that growth is slowing faster than expected. Markets are already expecting Flash PMIs to slow from prior numbers but are expecting a stronger Retail Sales print. Any bigger-than-expected miss will further exacerbate the slowing growth fears and could see some of the upside bounce in Sterling fade, while a bigger-than-expected beat could see some further recovery for the GBP. In the current stagflation context, we would prefer to trade Sterling on the short side in the event of a miss as opposed to buying it on a beat.
by thunderpips
8
EURGBP can move lower? 🦐EURGBP on the 4h chart is trading within an ascending channel. The price after the test of the historical string support provided a false breakout of the 0.8300 level and retraced to the upside. With a test of the 0.8500 weekly resistance the market moved to the descending trendline of a weekly channel and is now moving lower. How can i approach this scenario? I will wait for the EU market open and if the price will break below 2 support areas i will check 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
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy Accelerating policy normalization, but just don’t call it that. The March ECB meeting saw the ECB surprise markets by speeding up their normalization pace with the APP set to increase to EUR 40bln in April and then lowered to EUR 30bln in May and EUR 20bln in June, with an aim of ending APP in Q3. This was quite a shift, and alongside 2024 HICP expected at 1.9% it meant a hike for 2022 is still on the table. However, even though the statement was hawkish, the ECB tried very hard to come across as dovish as possible, no doubt trying to get a soft landing. The bank broke the link between APP and rates by saying hikes could take place ‘some time’ after purchases end (previously said ‘shortly’ after they end). President Lagarde also stressed that the Ukraine/Russia war introduced a material risk to activity and inflation (and it’s too early to know what the full impact of this will be). As a result, she stresses more than once that their actions with the APP should not be seen as accelerating but rather as normalizing (pretty sure going from open-ended QE to done in the next quarter is accelerating but maybe owls play by the different rules). To further add dovishness Lagarde also said that the war in Ukraine means risks are now again titled to the downside, compared to ‘broadly balanced’. After the meeting STIR markets and bund yields jumped to price in close to 2 hikes by year-end again, but the dovish push back from Lagarde saw the EUR come under pressure, failing to benefit from higher implied rates. 2. Economic & Health Developments Growth differentials still favour the US over EU capital flows, but differentials have turned positive against the UK. Given growing stagflation fears the ECB is in a tough spot, possibly being forced to normalize policy to try and combat inflation but could as a result damage growth. Ongoing EU fiscal discussions to possibly allow ‘green bonds’ NOT to count against budget deficits remains in focus, alongside debt issuance for energy purchases. If approved, it will offer a flood of fiscal support which would be positive for the EUR and EU equities. Geopolitics The EUR pushed lower aggressively after initial geopolitical scares but have been trying to carve out a base. Proximity to the war and the impact of sanctions remains a risk if the situation deteriorates. With the already priced, chasing the lows on bad news is not as attractive as chasing the EUR higher on good news. 3. CFTC Analysis CFTC data gave very little sentiment signals with mixed positioning changes as upside in Large Specs and Leveraged Funds was mostly offset by a hefty reduction in net longs from Asset Managers. 4. The Week Ahead Focus for the EUR will be on the outcome of Sunday’s 1st round of the French election and the ECB. For the election, there are 4 possible scenarios, Macron gets >50% to claim victory before 2nd round voting (EUR positive), Macron leads Le Pen with comfortable margin but not enough to claim victory (EUR positive but in line with consensus), Macron leads Le Pen with very tight margin (EUR negative), Le Pen leads Macron with any margin (expected to be very negative for EUR as is most unexpected outcome). For the ECB, after their more hawkish shift on QE in March where the bank accelerated their normalization path (but according to Pres Lagarde we’re not allowed to call it that ), markets are not expecting any new surprisesfor the April decision. However, the question is how the bank’s tone and language has evolved with HICP inflation jumping to 7.5% in March (and expected to possibly reach >10% before peaking). Will inflation be enough to urge more hawkish language from the hawks or will the risk of hiking into a possible stagflation slowdown cause enough angst from the doves to urge for a more patient stance. With the uncertainty on the geopolitical side and the wide range of possible outcomes, it seems unnecessary that the bank would anything right now. They are expected to reiterate their APP plans announced in March to reduction announced in March (increasing APP to €40bn in April, then reducing to €30bn in May, reducing down to €20bn in June and with a possible end in Q3). GBP FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy In March the BoE hiked rates by 25bsp as expected but delivered a bearish hike with BoE’s Cunliffe dissenting by voting to leave rates unchanged. This was a stark change from February where 4 members voted for a 50bsp hike. Cunliffe noted the negative impacts of higher commodity prices on real household incomes and economic activity as the main reason for his dissention, while remaining members thought a 25bsp hike was appropriate given the tight labour market and risks of second round effects. Even though inflation forecasts were upgraded to 8% in Q2 (previous 7.25%), the negative view that GDP was expected to slow to subdued rates showed growing concern of stagflation. The most bearish element of the statement was a change in language regarding incoming rates where the bank said they judge that some further modest tightening MIGHT be appropriate where previous guidance said more tightening was ‘LIKELY TO BE’ appropriate (a clear push against overly aggressive rate expectations). They further pushed back by noting the current implied rate path would see inflation would be below target in 3 years’ time, in other words saying they won’t hike as much, and confirms our estimates that policy reached peak hawkishness in February. The 100% odds of a 25bsp in May drifted to just above 80% on Friday, and markets will pay close attention to incoming BoE speak, where further push back against rates could be enough to see markets pricing out some of the >5 hikes still priced for 2022. As a result of the clear dovish tilt, we have adjusted our assessment of the bank’s policy stance to NEUTRAL. 2. Economic & Health Developments With inflation the main reason for the BoE’s recent rate hikes, there is a concern that the UK economy faces stagflation risk, as price pressures stay sticky while growth decelerates. That also means that current market expectations for rates continues to look way too aggressive even after the BoE’s recent push back. This means downside risks for GBP if growth data push lower and/or the BoE continue to push their recent dovish tone. 3. Political Developments Political uncertainty is usually GBP negative, so the PM’s future remains a risk. If distrust grows question remains on whether a no-confidence vote can happen (if so, short-term downside is likely), and whether he can survive the vote (a win should be GBP positive and a loss GBP negative). The Northern Ireland protocol remains a focus, with previous UK threats to trigger Article 16 and EU threats to terminate the Brexit deal if they do. Markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. 4. CFTC Analysis CFTC data for Sterling is very interesting with growing divergence between participant positioning as Large Specs and Asset Managers sit on sizeable (and growing) net shorts while Leveraged Funds continue to increase net longs. With fast money (Leveraged Funds) pushing higher and Asset Manager net-short reaching bottom 20 percentile levels (2007 used as base year) one of these two are on the wrong side. 5. The Week Ahead Labour and CPI data will be the main data highlights for the UK this week. For inflation our same concerns as the March data print are in focus where a higher-than-expected print might not necessarily be seen as a positive. Usually, higher inflation should be a positive for the currency as it means more chances of higher interest rates. However, the bank has been clear that there is a trade-off between inflation and growth and has explained their reluctance to deliver on STIR expectations for much higher rates. Thus, higher rates would not necessarily lead to higher rate expectations but instead could be seen as a negative with stagflation risks in view. For the labour print, it might be tricky to trade as the question will be on whether markets focus on real household incomes or second-round effects. The BoE has been very concerned with second-round effects which means higher-than-expected earnings ‘should’ increase inflation expectations which could be seen as a negative for Sterling as explained. However, if the focus is on real household incomes increasing as a result of much higher average earnings that could be seen as a positive. Recall that the main reason for Cunliffe’s dissent in March was due to inflation’s impact on real household incomes. That means labour data could be a tricky one to navigate for Sterling on Tuesday.
by thunderpips
1
EURGBP - FUNDAMENTAL AND TECHNICAL VIEWToday is not an important day for GBP. But CONSTRUCTION PMI DATA is due to be released today for GBP. It's the LOW IMPACT NEWS. But there is some significance. Also GERMAN FACTORY ORDERS and PPI m / m DATA will be released for EUR today. They are also HIGH VOLATILE but are very important INDICATORS. - EUR FEATURE currently stands at 1.0921 LEVEL. We can expect a very DOWN TREND compared to the previous days. It is located below the DYNAMIC S / R LEVELS. Also the GBP FEATURE stays at 1.3065 LEVEL. The EURGBP PRICE is priced below the DYNAMIC S / R LEVELS. Therefore, most of the time the PRICE can be sold and bought in the form of a STRUCTURE. Before that a RETRACEMENT can come to DYNAMIC S / R LEVELS. - Currently the SENTIMENT of the OVERALL MARKET is NEUTRAL. But it's too heavy for RISK OFF status. Also the EQUITIES are turning a bit red. VIX is getting a bit UP. Also COMMODITIES are now showing a DOWN SIDE BIAS. There is a NEUTRAL BIAS currently on the market. But because of VIX UP, EQUITIES DOWN, COMMODITIES DOWN the MARKET RISK is OFF. - EURGBP PRICE can be DOWN to 0.8303 LEVEL before UP. Then you can UP to LEVEL 0.8498. The PRICE will move according to this week's ECONOMIC INDICATOR DATA and MARKET SENTIMENT.
by benny_marshall
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy Accelerating policy normalization, but just don’t call it that. The March ECB meeting saw the ECB surprise markets by speeding up their normalization pace with the APP set to increase to EUR 40bln in April and then lowered to EUR 30bln in May and EUR 20bln in June, with an aim of ending APP in Q3. This was quite a shift, and alongside 2024 HICP expected at 1.9% it meant a hike for 2022 is still on the table. However, even though the statement was hawkish, the ECB tried very hard to come across as dovish as possible, no doubt trying to get a soft landing. The bank broke the link between APP and rates by saying hikes could take place ‘some time’ after purchases end (previously said ‘shortly’ after they end). President Lagarde also stressed that the Ukraine/Russia war introduced a material risk to activity and inflation (and it’s too early to know what the full impact of this will be). As a result, she stresses more than once that their actions with the APP should not be seen as accelerating but rather as normalizing (pretty sure going from open-ended QE to done in the next quarter is accelerating but maybe owls play by the different rules). To further add dovishness Lagarde also said that the war in Ukraine means risks are now again titled to the downside, compared to ‘broadly balanced’. After the meeting STIR markets and bund yields jumped to price in close to 2 hikes by year-end again, but the dovish push back from Lagarde saw the EUR come under pressure, failing to benefit from higher implied rates. 2. Economic & Health Developments Recent activity data suggests the hit from lockdowns weren’t as bad as feared, but Omicron restrictions weighed on growth. Differentials still favour the US but interestingly has turned positive against the UK. The big focus is on the incoming data to offer further clues of possible stagflation, where the ECB could be forced to act on rates due to higher inflation but would negatively impact demand and growth as a result. There’s also focus on the fiscal side with ongoing discussions to potentially allow purchases of ‘green bonds’ NOT to count against budget deficits, and the possibility of major new debt issuance to finance energy purchases. If approved, this can drastically change the fiscal landscape and would be a positive for the EUR and EU equities. Geopolitics Even though the EUR, through Western sanctions, have dodged potential weakness from the CBR selling the EUR to prop up the RUB, the single currency was not immune for long. It held up okay initially, but as proximity risk to the war and economic risk from supply constraints and sanctions grew, the risk premium ballooned, sending EUR risk reversals sharply lower and implied volatility higher. Even though further geopolitical developments will be important to watch, the EUR already saw very big moves lower, which means right now chasing the lows on bad news aren’t as attractive as chasing highs on good news. 3. CFTC Analysis Further bullish sentiment signals from last week’s positioning changes with Asset Managers and Leveraged Funds both adding a chunky number of net-longs. Still trading close to recent lows means speculative EUR longs versus the GBP and CAD looks interesting but doing so without catalysts at this stage is very risky. 4. The Week Ahead The week ahead will be a quiet one for the EUR. We have Final PMI data coming up which will be interesting to watch after the surprisingly solid numbers out of France and Germany (despite the geopolitical developments). However, since they are Final prints, they are not expected to be enough to create any major market reactions, unless we see a massive deviation between the Flash and Final data. Apart from that, geopolitical risks will still be in focus given the Eurozone’s proximity to the war, and their dependence on Russian oil and gas, where any major escalations (expected to be EUR negative) or de-escalations (expected to be EUR positive) will be on the radar. The pop higher in the EUR earlier last week on the back of positive negotiation developments showed us how overly sensitive the EUR is with positive news compared to negative news, which we think is mainly a case of short-term positioning. Our preferred way of expressing any positive EUR developments is through EURGBP longs and possibly EURCAD longs (with Friday’s incoming Canadian jobs report in focus). GBP FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy In March the BoE hiked rates by 25bsp as expected but delivered a bearish hike with BoE’s Cunliffe dissenting by voting to leave rates unchanged. This was a stark change from February where 4 members voted for a 50bsp hike. Cunliffe noted the negative impacts of higher commodity prices on real household incomes and economic activity as the main reason for his dissention, while remaining members thought a 25bsp hike was appropriate given the tight labour market and risks of second round effects. Even though inflation forecasts were upgraded to 8% in Q2 (previous 7.25%), the negative view that GDP was expected to slow to subdued rates showed growing concern of stagflation. The most bearish element of the statement was a change in language regarding incoming rates where the bank said they judge that some further modest tightening MIGHT be appropriate where previous guidance said more tightening was ‘LIKELY TO BE’ appropriate (a clear push against overly aggressive rate expectations). They further pushed back by noting the current implied rate path would see inflation would be below target in 3 years’ time, in other words saying they won’t hike as much, and confirms our estimates that policy reached peak hawkishness in February. The 100% odds of a 25bsp in May drifted to just above 80% on Friday, and markets will pay close attention to incoming BoE speak, where further push back against rates could be enough to see markets pricing out some of the >5 hikes still priced for 2022. As a result of the clear dovish tilt, we have adjusted our assessment of the bank’s policy stance to NEUTRAL. 2. Economic & Health Developments With inflation the main reason for the BoE’s recent rate hikes, there is a concern that the UK economy faces stagflation risk, as price pressures stay sticky while growth decelerates. That also means that current market expectations for rates continues to look way too aggressive even after the BoE’s recent push back. This means downside risks for GBP if growth data push lower and/or the BoE continue to push their recent dovish tone. 3. Political Developments Political uncertainty is usually GBP negative, so PM Johnson’s the remains a question mark, even though fallout from the Sue Gray report was limited. If distrust grows the question remains whether a vote of no-confidence could happen (if so, short-term downside is likely). Focus will then be on whether the PM can survive a noconfidence vote (a win should be GBP ▲ and a loss GBP ▼). The Northern Ireland protocol remains a focus as well with previous UK threats to trigger Article 16 and EU threats to terminate the Brexit deal if they do. For now, markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. 4. CFTC Analysis Recent CFTC data showed a mixed bag for GBP positioning once again as large specs and asset managers increased net-short positioning while leveraged funds increased net-longs by a whopping 20K contracts. For now, positioning doesn’t provide much in the way of a directional bias. However, price action at the index level has been somewhat stretched to the downside recently so be mindful of that. 5. The Week Ahead Economic data will be very light for the UK with no major data points on the schedule. We do have BoE speak in the mix again with BoE’s Bailey, Cunliffe and Phil expected to speak. Bailey might not give us anything new on monetary policy after his speech this past week (which saw him sticking to recent dovish rhetoric), but Cunliffe and Phil could be interesting. Recall that it was Cunliffe who dissented at the March meeting and voted to keep rates unchanged given the risks to the consumer, so markets will be paying attention to what he has to say. Similarly, chief economist Phil’s comments will be viewed, but taking them with a pinch of salt would be a good idea since his communication and actual policy decision has been quite different from one another in recent months (not putting his vote where his comments is). Our bias for Sterling remains neutral with a skew towards bearish but prefer to express that view with EURGBP right now, which means we will use any bearish sentiment shifts for Sterling to use as opportunities for possible EURGBP longs.
by thunderpips
4
EURGBP:Freefall Likely To Continue As Price Met Stern ResistanceThis Pair has been in a spotlight for quite sometime because it has been in a gradual free fall over some previous years. Now the free fall seems likely to continue as the the crucial support level of 0.83000 has been violated on both monthly and weekly time frames! Some few weeks ago, the 0.83000 level was finally violated and now the price seems likely to continue its downtrend towards the next potential resistance lying at 0.8000 psychological level. Last week however we saw an impulse move that was met with stern resistance at the 0.85000 psychological level as evident on the main chart. The price is currently being capped by descending parallel channel. In this scenario the 0.8500 psychological resistance level becomes a vital part as stop loss. The trade criteria has been met already and now would be the ideal good time to take this pair short. Below are the details: TRADE TYPE: SHORT SWING TRADE ENTRY: ABOVE 0.83000 (FOR RR TO REMAIN > 1) STOP LOSS: 0.85500 TAKE PROFIT: 0.83000 NOTE: In unlikely circumstances, this trade would only be considered to HIT stop loss when the price hits 0.85500 level. After this its advisable to wait and see where does the monthly candle closes. Shall it close above 0.85000 then the trade has been nullified, on the other hand shall it close below 0.85000 then we can take this trade short again as the price failed to clear the 0.85000 psychological level! Trade Safely. I hope you find this insight helpful. Please LIKE & FOLLOW for more insights into Major & Minor Currency pairs.
Short
by FX618Analysis
3