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Eur-gbp

EURGBP, H1 | Potential reversal We're seeing price rise towards a major overlap resistance at 0.8552 which also coincides with a 23.6% Fibonacci retracement, 38.2% Fibonacci retracement and a shorter term 61.8% Fibonacci retracement. It's worth noting that there's a fair bit of bearish momentum too wish the descending resistant line and the bearish ichimoku cloud pushing prices down. A drop from here could see pries drop to 0.8524. Please be advised that the information presented on TradingView is provided to FXCM (‘Company’, ‘we’) by a third-party provider (‘Name of third party provider). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Name of third party provider. The speaker(s) is neither an employee, agent nor representative of FXCM and is therefore acting independently. The opinions given are their own, constitute general market commentary, and do not constitute the opinion or advice of FXCM or any form of personal or investment advice. FXCM neither endorses nor guarantees offerings of third party speakers, nor is FXCM responsible for the content, veracity or opinions of third-party speakers, presenters or participants. High Risk Investment Warning Trading Forex/CFDs on margin carries a high level of risk and may not be suitable for all investors. Leverage can work against you. Forex Capital Markets Limited (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 71% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. FXCM EU LTD (www.fxcm.com): CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 75% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. FXCM Australia Pty. Limited (www.fxcm.com): ** Trading FX/CFDs carries significant risks. FXCM AU (AFSL 309763), please read the Financial Services Guide, Product Disclosure Statement, Target Market Determination and Terms of Business at www.fxcm.com FXCM Markets LLC (www.fxcm.com): Losses can exceed deposits.
Short
by FXCM
1
EURGBP: Sell following the 1D MA50 rejection.EURGBP got rejected last week on the 1D MA50 turning the 1D timeframe bearish technically (RSI = 42.823, MACD = -0.002, ADX = 20.983). Given the fact that the 2023 pattern is a Bearish Megaphone, we expect a continuation of this downtrend to the LL trendline. We are selling with an initial target on the 0.786 Fibonacci level (TP = 0.84450). ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
Short
by InvestingScope
1
EUR GBP - FUNDAMENTAL ANALYSISCurrency Markets on UK Recession Watch - There has been high volatility in the Pound to Euro (GBP/EUR) exchange rate during the past week. GBP/EUR posted a fresh 9-month best conversion at 1.1735 early in the week before a slide to below 1.1600 after the Bank of England (BoE) policy decision. Weaker than-expected Euro-Zone data helped strengthen GBP/EUR to 1.1700 on Friday. Both the ECB and Bank of England will want to maintain a hawkish policy stance. Evidence on economic strength is likely to be a key element in the short term. Aggressive BoE Action to Fight Inflation The latest UK inflation data recorded an unchanged headline rate of 8.7% while the core rate increased to 7.1% from 6.8%. The Bank of England (BoE) increased interest rates by 50 basis points to 5.0% this week as it looks to bring inflation under control. The UK 2-year yield has increased to a fresh 15-year high of 5.15%. Following the BoE move, investment banks have raised their rate forecasts. JP Morgan, for example, now expects that rates will be increased to 5.75%. The bank added; “This new policy rate level in our forecast recognizes that there is a dynamic between wage and prices that needs to be stopped and assumes the BoE will need to hike further in order to trigger a significant weakening in the labour market.” High yields will provide an element of support to the Pound, especially with short-term yields comfortably above longer-term rates. According to ING; “From a currency perspective, a sharply inverted yield curve can work as a positive factor for a reserve currency like the pound (as opposed to growth-sensitive currencies). We suspect that a rebound to 0.88 in EUR/GBP(1.1360 for GBP/EUR) will need to be delayed on the back of that.” Commerzbank is still not confident that the BoE has got a grip on inflation. According to the bank; “So the impression remains of a central bank that was too slow in starting to hike its key rate and moved to smaller rate steps too early, even signalling a possible pause. The BoE seems to be chasing inflation developments rather than fighting them with an active monetary policy, which is damaging for Sterling. It added; “As we do not believe that the BoE will suddenly take a different approach, we remain sceptical for Sterling.” UK Economic Fears Liable to Increase The latest UK PMI business confidence data recorded a decline in the manufacturing index to a 6-month low of 46.2 for June from 47.1 previously and below consensus forecasts of 46.8. The services-sector index also retreated to a 3-month low of 53.7 from 55.2 and below expectations of 54.8. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence commented; “while the June survey reveals the economy to be cooling as a result of higher interest rates, the stubbornly elevated price growth in the service sector suggests the Bank of England will consider its fight against inflation as still a work in progress. However, such rate hikes will clearly add further to the likelihood of a recession later in the year, which is looking increasingly inevitable as collateral damage in the fight against inflation.” According to TD Securities; “Rates are reaching a point where they will have a negative impact on growth, which is feeding back into a weaker currency.” The bank expects that the economy will suffer; “We now expect three more 25 bps hikes in Bank Rate, taking it to 5.75% in November. As policy tightening catches up to the real economy, a recession is likely to emerge this winter, with cuts coming in Bank Rate from February 2024.” It adds; “The 50 bps hike plays well into our EUR/GBP topside view, where we could see a push towards the top-end of the recent range back near 0.89 in the months ahead.” (1.1235 for GBP/EUR). Euro-Zone Unease Intensifies The latest Euro-Zone PMI business confidence data recorded a decline in the manufacturing index to a 37-month low of 43.6 for June from 44.8 the previous month and compared with an unchanged reading for the month. The services-sector index also retreated to a 5-month low of 52.4 for the month from 55.1 previously and well below expectations of 54.5. The data will reinforce near-term unease surrounding the Euro-Zone outlook. At this stage, the ECB has maintained a hawkish policy stance and is expecting to increase interest rates further at the July policy meeting. As Euro-Zone inflation declines, it is likely that the real interest rates will increase and potentially move into positive territory. If UK inflation is stubborn, real UK rates will remain low and potentially negative. In this context, Danske Bank notes; “On balance, we continue to see relative rates as a positive for EUR/GBP from here, which is one of several reasons behind our fundamental predisposition of buying EUR/GBP dips. We highlight that whether the aggressive BoE market pricing will subside or inflation continues to surprise, we see it as headwinds for GBP.” It has a 6-month GBP/EUR forecast of 1.1360. Berenberg still has an end-2023 GBP/EUR forecast of 1.1765.
Long
by thunderpips
17
EURGBP Trading the Range - 0.852 convictionHey Traders! 👋 For Day 39/100 of our challenge, we will look at EURGBP short idea and how we can trade the range Technicals: - Prior to range, structure was bearish - Strongly rejected 0.863 key level - Now retesting middle limit pivot area - 79% retracement rejected as well - Expecting the fill of range bottom at 0.852 Fundamentals: 🇪🇺 Despite ECB remaining hawkish, recent data have been negative in both inflation and labor. This gives ECB less room to be hawkish/raise rates further compared to BoE 🇬🇧 The main downside risk for BoE now is the aggressive pricing in of peak rates by the rate markets. However, BoE has done a great job in meeting expectations lately: surprise hike of 50bp and the lack of push back on aggressive rate markets. The UK has also been seeing positive data recently which gives them more room to raise rates to battle inflation. Now, a hard landing due to aggressive rate hikes is also another risk. But it seems that the market isn't paying much attention to that as much as inflation currently. So that leaves us with the EURGBP short expectations this week. Any changes in catalysts is possible with inflation data from around the world is released. So stay safe, and see you tomorrow 👍
Short
by rob_WRLD_
EUR GBP - FUNDAMENTAL ANALYSISCurrency Markets on UK Recession Watch - There has been high volatility in the Pound to Euro (GBP/EUR) exchange rate during the past week. GBP/EUR posted a fresh 9-month best conversion at 1.1735 early in the week before a slide to below 1.1600 after the Bank of England (BoE) policy decision. Weaker than-expected Euro-Zone data helped strengthen GBP/EUR to 1.1700 on Friday. Both the ECB and Bank of England will want to maintain a hawkish policy stance. Evidence on economic strength is likely to be a key element in the short term. Aggressive BoE Action to Fight Inflation The latest UK inflation data recorded an unchanged headline rate of 8.7% while the core rate increased to 7.1% from 6.8%. The Bank of England (BoE) increased interest rates by 50 basis points to 5.0% this week as it looks to bring inflation under control. The UK 2-year yield has increased to a fresh 15-year high of 5.15%. Following the BoE move, investment banks have raised their rate forecasts. JP Morgan, for example, now expects that rates will be increased to 5.75%. The bank added; “This new policy rate level in our forecast recognizes that there is a dynamic between wage and prices that needs to be stopped and assumes the BoE will need to hike further in order to trigger a significant weakening in the labour market.” High yields will provide an element of support to the Pound, especially with short-term yields comfortably above longer-term rates. According to ING; “From a currency perspective, a sharply inverted yield curve can work as a positive factor for a reserve currency like the pound (as opposed to growth-sensitive currencies). We suspect that a rebound to 0.88 in EUR/GBP(1.1360 for GBP/EUR) will need to be delayed on the back of that.” Commerzbank is still not confident that the BoE has got a grip on inflation. According to the bank; “So the impression remains of a central bank that was too slow in starting to hike its key rate and moved to smaller rate steps too early, even signalling a possible pause. The BoE seems to be chasing inflation developments rather than fighting them with an active monetary policy, which is damaging for Sterling. It added; “As we do not believe that the BoE will suddenly take a different approach, we remain sceptical for Sterling.” UK Economic Fears Liable to Increase The latest UK PMI business confidence data recorded a decline in the manufacturing index to a 6-month low of 46.2 for June from 47.1 previously and below consensus forecasts of 46.8. The services-sector index also retreated to a 3-month low of 53.7 from 55.2 and below expectations of 54.8. Chris Williamson, Chief Business Economist at S&P Global Market Intelligence commented; “while the June survey reveals the economy to be cooling as a result of higher interest rates, the stubbornly elevated price growth in the service sector suggests the Bank of England will consider its fight against inflation as still a work in progress. However, such rate hikes will clearly add further to the likelihood of a recession later in the year, which is looking increasingly inevitable as collateral damage in the fight against inflation.” According to TD Securities; “Rates are reaching a point where they will have a negative impact on growth, which is feeding back into a weaker currency.” The bank expects that the economy will suffer; “We now expect three more 25 bps hikes in Bank Rate, taking it to 5.75% in November. As policy tightening catches up to the real economy, a recession is likely to emerge this winter, with cuts coming in Bank Rate from February 2024.” It adds; “The 50 bps hike plays well into our EUR/GBP topside view, where we could see a push towards the top-end of the recent range back near 0.89 in the months ahead.” (1.1235 for GBP/EUR). Euro-Zone Unease Intensifies The latest Euro-Zone PMI business confidence data recorded a decline in the manufacturing index to a 37-month low of 43.6 for June from 44.8 the previous month and compared with an unchanged reading for the month. The services-sector index also retreated to a 5-month low of 52.4 for the month from 55.1 previously and well below expectations of 54.5. The data will reinforce near-term unease surrounding the Euro-Zone outlook. At this stage, the ECB has maintained a hawkish policy stance and is expecting to increase interest rates further at the July policy meeting. As Euro-Zone inflation declines, it is likely that the real interest rates will increase and potentially move into positive territory. If UK inflation is stubborn, real UK rates will remain low and potentially negative. In this context, Danske Bank notes; “On balance, we continue to see relative rates as a positive for EUR/GBP from here, which is one of several reasons behind our fundamental predisposition of buying EUR/GBP dips. We highlight that whether the aggressive BoE market pricing will subside or inflation continues to surprise, we see it as headwinds for GBP.” It has a 6-month GBP/EUR forecast of 1.1360. Berenberg still has an end-2023 GBP/EUR forecast of 1.1765.
Long
by thunderpips
7
Decoding Forex Mysteries: USDCHF & EURGBP Reaction to Rate HikesWelcome to the intriguing world of Forex, where currencies act at their own rhythm, sometimes defying expectations and confounding even the most experienced traders. In this article, we are going to unravel the “mysteries” surrounding the reactions of USDCHF and EURGBP to recent interest rate hikes. We will dive into the realms of market anticipation, monetary policy statements, and the significance of staying ahead in this dynamic landscape. 1. The Resilience of USDCHF As the Swiss National Bank (SNB) raises interest rates from 1.5% to 1.75%, market observers brace for the anticipated downward movement of the USDCHF. However, contrary to expectations, the currency pair displays remarkable resilience. Let's explore the underlying factors: a) Priced-in Expectations: The forex market is renowned for its ability to assimilate information in advance. It is likely that market participants had already factored in the interest rate hike, blunting the immediate impact on USDCHF. Such anticipatory behavior highlights the importance of staying attuned to prevailing sentiment and analyzing market positioning. b) Comparative Interest Rates: Understanding the relative interest rates of different currencies is paramount. If the rate hike in Switzerland was aligned with or lower than market expectations, and other major currencies offered more attractive rates, investors might have favored those currencies, mitigating the downward pressure on USDCHF. c) Monetary Policy Statement Outlook: Monetary policy statements accompanying interest rate decisions provide crucial insights into central banks' future intentions (you can usually watch them live on YouTube 30 minutes after the data release or on Bloomberg type of channels). Since the SNB's statement revealed a cautious and neutral stance, it has tempered the impact of the rate hike on USDCHF. Market participants pay close attention to forward guidance, as it shapes expectations regarding future policy actions and influences currency movements. 2. The Curious Behavior of EURGBP Let us now turn our attention to EURGBP, which failed to sustain a short sentiment following the Bank of England's interest rate hike from 4.5% to 5.00% (versus the expected 4.75%) and left a nasty week. To understand this curious behavior, we delve into the following factors: a) Market Expectations: The forex market is often driven by expectations and anticipatory positioning. If traders had already priced in the interest rate hike, the actual announcement might not have triggered a significant market reaction. Therefore, the lack of sustained short sentiment in EURGBP could be attributed to market participants adjusting their positions in advance. The GBP was up already by 4% within the last month against major currencies, so a big chunk of market was already longing EG for the expected short term recovery (guilty, but we also made a 2.9% profit closure on this). b) Monetary Policy Outlook: Beyond interest rate changes, central banks' monetary policy outlooks play a vital role in shaping currency dynamics. The accompanying statement from the Bank of England, which shed light on their future plans, indicated a more gradual approach to tightening or expressed concerns about economic conditions. Such cues influence market sentiment and limit the downward pressure on EURGBP. In case of UK, this is already not a good look with their inflation rates :/ Now, you may ask: “Investroy, what do we do if fundamentals don’t exhibit the expected economical impact?” Don’t worry, we got you! A Prerequisite for Success In the ever-evolving forex market, staying ahead of the curve is crucial. To navigate the intricacies and maximize opportunities, traders must adopt a proactive approach: a) Monitor Central Bank Communications: Understanding central banks' intentions requires careful analysis of their policy statements, speeches, and press conferences. These sources provide valuable clues about future policy decisions and can guide trading strategies. b) Assess Economic Indicators: Keep a keen eye on economic indicators that impact currency valuations, such as GDP, inflation, and employment data. These indicators provide a foundation for understanding a country's economic health and can influence currency movements. c) Stay Informed of Geopolitical Developments: Geopolitical events, such as trade disputes or political instability, can significantly impact forex markets. Being aware of these developments and their potential consequences on currency movements is crucial for staying ahead. d) Analyze Market Sentiment: Sentiment analysis, gauging the collective psychology of market participants, can offer valuable insights. Monitoring market sentiment through various indicators, such as positioning data and sentiment surveys, helps identify potential shifts and align trading strategies accordingly. e) Embrace Technological Tools: Utilize advanced trading platforms and tools that provide real-time data, customizable charts, and algorithmic trading capabilities. These resources empower traders to analyze market trends, spot patterns, and execute trades swiftly. Bonus) this one is a little subjective, but markets are very cyclic, if something is oversold, but everybody is expecting further bearish move, be sure there is a retracement coming before that happens 😊 Stay safe and enjoy your day!
Editors' picks
Education
by Investroy
23
EURGBP Expectations: UK Inflation and BoE's Decision this WeekOn Monday, the pound reached its highest level against the euro in 10 months, at 85.25 pence, as investors await the British inflation data and the upcoming Bank of England decision. However, the currency pair quickly rebounded to the support level of the previous week, at 85.42 pence, but is perhaps now tracking down again. In recent weeks, the sterling has experienced a rallied against the EUR and USD (particularly against the USD, marking its largest weekly gain since December 2022). This surge can be attributed to economic data suggesting that inflation in Britain is more persistent compared to the United States and Europe. As a result, traders have started factoring in more interest rate hikes from the Bank of England, leading to increased yields on British government bonds and bolstering the pound. Additionally, investors' expectations have been heightened by recent data showing a faster-than-anticipated growth in British wages. Currently, the pound is down 0.26% against the dollar, trading at $1.278. However, it remains close to the 14-month high of $1.285 reached on Friday. British inflation data is scheduled to be released on Wednesday. Economists predict that the headline Consumer Price Index will have slightly cooled to 8.5% year-on-year, down from 8.7% in April. However, they anticipate that the core CPI, which excludes volatile food and energy costs, will remain steady at 6.8%. If these figures align with expectations, the pound could strengthen further due to the anticipation of additional interest rate increases by the Bank of England. Nevertheless, any unexpected results could introduce volatility into the market, and perhaps validate the recent rebound in the EUR. On Thursday, the Bank of England will announce its decision on interest rates, with investors and economists expecting a 25 basis point hike to 4.75%. There is little uncertainty surrounding this decision, so traders will closely examine the bank's forward guidance. Indications of future interest rate hikes are likely to bolster the GBP.
by BlackBull_Markets
EUR GBP - FUNDAMENTAL ANALYSISBNP Paribas 2023-2024 Exchange Rate Forecasts Euro Can Secure Capital Inflows The bank maintains a broadly constructive stance towards the Euro. It expects that the ECB rate hikes and quantitative tightening will encourage foreign inflows and domestic repatriation. Although BNP expects that energy prices will strengthen, it does not expect a return to 2021 levels. Overall, the bank expects gradual EUR/USD gains over the medium term. Pound Vulnerable on Weak UK Fundamentals BNP expects that the Bank of England (BoE) will have to increase interest rates further, but does not consider that market expectations of rate hikes to 5.75% will be met which will sap currency support. It also considers that the BoE is in a no-win situation. Even if the central bank continues to raise rates, BNP also expects that market confidence in Sterling would suffer to the perception of a long-term inflation problem. It adds; “Both of these developments would be GBP-negative, in our view.” The bank also maintains a negative stance on UK fundamentals. It adds; “We expect GBP to remain structurally weak due to UK growth underperforming its peers, remaining below-trend, and its persistent current-account deficit that requires foreign funding.” Overall, BNP expects that the Euro to Pound (EUR/GBP) exchange rate will trade close to 0.88 during the forecast period.
Long
by thunderpips
3
EURGBP to 0.85? Anyone else with me?Hey Traders! 👋 For Day 30/100 of our challenge, we will look at EURGBP for downside potential this week/month Technicals: - Overall downtrend - Break below 0.858 support - Support created at 0.0.854 - Expecting retest back to 0.858 for potential shorts - Or a break and retest of 0.854 - Target is 0.85 - Invalid thesis when 0.861 is breached to the upside Fundamentals - Expecting less room for ECB to rate hikes; they will this month by 25bp but sound less hawkish - Expecting GBP to be stronger given better domestic data and an aggressive peak rate pricing That's all for today. Forecasts these week on TradingView has been awesome. Follow and stay in touch 🥂
Short
by rob_WRLD_
2
EUR GBP - FUNDAMENTAL ANALYSIS2023-2024 Exchange Rate Forecasts From MUFG Pound Sterling: BoE Forecasting Errors Increase GBP Risk Profile MUFG has significant reservations surrounding the Pound outlook. As far as inflation is concerned, it sees significant risks over the medium-term implications. It notes; “The sense that the UK has a bigger inflation problem is creating downside risks for the pound that may see a period of underperformance if the evidence continues to suggest this.” MUFG also notes problems with the bank’s model failure to forecast higher inflation. According to the bank; “BoE Governor Bailey stated that it was no longer following the information from the model which will only exacerbate risks of policy errors and the potential for a bigger inflation problem in the UK.” Overall, MUFG expects a mixed outlook for the Pound, especially as it expects UK yields will decline amid weak credit demand and evidence of weaker employment. It expects the downgrading of BoE rate expectations will hurt the Pound against the Euro with EUR/GBP forecast at 0.90 in 12 months.
Long
by thunderpips
6
EURGBP Excellent buy opportunityEURGBP is rebounding after hitting Support (1) which was last touched on December 13th 2022. This is a short-term buy opportunity but the long term trend remains bearish, not only due to the Falling Resistance since February but also 3rd but also due to the formation of a Death Cross (1d), the first since Jnuary 21 2021. Trading Plan: 1. Buy on the current market price. Targets: 1. 0.87150 (Resistance 1) and estimated contact with the MA50 (1d). Tips: 1. The RSI (1d) is trading under a Falling Resistance, same as February through March. I made a reversal after touching the oversold level of 30.00. This is a strong additionl reason to buy on the short term. Please like, follow and comment!! Notes: Past trading plan:
Long
by TradingBrokersView
9