eurgbp faces the risk of a medium term decline ahead of boe 1821362016
Today’s main focus on the marketplace will be the Bank of England’s monetary policy announcement that is out later at 1100 GMT. Prior to today […]
Today’s main focus on the marketplace will be the Bank of England’s monetary policy announcement that is out later at 1100 GMT. Prior to today […]
Today’s main focus on the marketplace will be the Bank of England’s monetary policy announcement that is out later at 1100 GMT.
Prior to today much awaited BOE’s Monetary Policy Committee meeting, Governor Mark Carney has already dropped “hints” through public announcements after the vote on Brexit that monetary stimulus is required to steam any potential economic shock that arises from Brexit.
Further monetary stimulus can be a cut on the current benchmark interest rate which is already a historical low of 0.50% since March 2009 or more quantitative easing through is Asset Purchase Facility now set at ceiling of GBP375bn.
On the average, economists surveyed by major media outlets expect the BOE to cut its benchmark interest rate by 25bps to 0.25% with mixed expectations on further quantitative easing at this juncture.
Let us take a look at the EUR/GBP cross from a technical analysis perspective which has received a lot flows in the post Brexit environment.
(Click to enlarge charts)
Pivot (key resistance): 0.8512
Supports: 0.8230 & 0.8130/8068
Next resistance: 0.8710/8740
Technical elements are now in favour of a potential short to medium-term pull-back/consolidation for the EUR/GBP. As long as the 0.8512 pivotal resistance is not surpassed, the cross pair is likely to stage a decline to target the supports at 0.8230 and even 0.8130/8068 before another potential upleg materialises.
However, a clearance above the 0.8512 pivotal resistance may invalidate the preferred pull-back scenario for a direct rise towards the next resistance at 0.8710/8740.
Charts are from eSignal
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