EURGBP: Bullish Technicals and Fundamentals 4H (Apr. 21)X FORCE GLOBAL ANALYSIS:
In this analysis, we explore the bullish probabilities of EUR/GBP based on the bullish evidence suggested by technicals and fundamentals.
Technicals
- We have seen a breakout from the bullish falling wedge pattern
- After Elliott Triangle Wave (ABCDE) counts to Wave E, we formed a double bottom
- The Relative Strength Index (RSI) shows higher lows, as a sign of trend strength
- The Moving Average Convergence Divergence (MACD), despite not showing tremendous momentum, shows an uptrend
Fundamentals
- The United Kingdom runs a large current account deficit, which makes the pound vulnerable as capital flows faded at the height of the Corona Virus (Covid-19) driven risk sell-off
- GBP remains fundamentally undervalued with a significant Brexit discount still attached
- With the COVID-19, both the EU and the UK have been preoccupied with issues other than Brexit trade agreement talks; this increases the risk of a big negative UK trade shock in 2021
What We Believe
We believe in a higher probability for a further bullish rally for EUR/GBP based on the bullish technicals and fundamentals
Trade Safe.
