Market Analysis

EUR/USD, EUR/GBP Price Action Set-Up for ECB

EUR / USD, EUR / GBP Price analysis and news

  • The ECB is unlikely to surprise
  • EUR/USD Supported in Dips until 1.20
  • EUR /GBP Recovery from last week’s return

EUR/ USD: Today’s ECB meeting is unlikely to cause much volatility, as indirect currencies signal a 44-point breakthrough (expected movement). Since the last meeting, there has been some news flow, as the euro has largely recovered, while bond yields have fallen in favor of the euro, while the EU inoculation rate has improved and the EUR / USD has thus returned to its 1.20 grip. As the economic forecasts have not been updated (until June), today’s meeting is a summary of the current background, it goes without saying that the meeting should have a limited impact on the euro.

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Yesterday’s decline in the euro had been short-lived as dip buyers defended the bull’s encouraging sign of 1.20. But if 100DMA remains, the pair seems to be consolidating. The observable level of the minus side is 1.1990 (previous resistance, now support), if it should give in, it is 1.1956 and 1.1925, where 50 and 200DMA live, respectively. On top is the key resistance at handle 1.21, which also coincides with the 61.8% Fibonacci retracement of the YTD range. Although the pair is consolidating in the near future, purchases in key support areas will keep the outlook positive and it will take less than 200DMA to deny this view.

EUR / USD chart: daily schedule

Euro last: EUR / USD, EUR / GBP Configuration of price operations for the ECB

Source: Refinitive



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customers are net short.

Change in

Long

Shorts

Hello

Everyday 13% -4% 2%
Every week 2% -8% -5%

Look at the spread: EUR / USD vs US / GE 10YR bond spread

Euro last: EUR / USD, EUR / GBP Configuration of price operations for the ECB

Source: Refinitive

EUR / GBP: The cross has continued to turn last week as EUR / GBP trades at 0.8660. This means that a solid resistance at 0.8700-0.8720 is likely to consolidate the rallies in the short term and accelerate cross-pressure back to 0.88600. Next to it as I’ve said it before, Real yields in the UK and the EU continue to point to lower junctions, and so I will continue to fall against the EUR / GBP as we move back to the mid-0.85s. Although this opinion will be re-evaluated when the cross section is 0.8730-35. Note that we are now approaching the Scottish elections, and although I believe that this will have a limited impact on the pound, I suspect that a small political risk premium will be attached to the pound over the next few weeks.

EUR / GBP chart: daily schedule

Euro latest: EUR / USD, EUR / GBP Configuration of price operations for the ECB

Source: Refinitive



customers are network long.



customers are net short.

Change in

Long

Shorts

Hello

Everyday 3% -17% -8%
Every week 7% -7% 0%

The difference between the real performance of the UK and GE

Euro last: EUR / USD, EUR / GBP Configuration of price operations for the ECB

Source: Refinitive

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