EUR/GBP bulls taking charge, looking to 0.8936?
- EUR/GBP bulls in control on Monday.
- EUR/GBP bears nocked back by Brexit concerns despite hawkish BoE.
EUR/GBP ended NY at 0.8810 down 0.34% and was better bid in the open of Asia overnight until a break from the bears to the 100 hourly SMA at 0.8843. However, the cross picked up by the bulls again in London and currently, EUR/GBP is trading at 0.8879, up 0.30% on the day, having posted a daily high at 0.8883 and low at 0.8843.Sterling caught a short-term bid last week on the hawkish BoE on the back of the Central Bank's rate path forecasted that is seen to weigh on a steady EZ outlook.
EUR/GBP toss-up between Brexit and BoE
Vlieghe: Rise in the UK debt burden not sustainable
However, even though EUR/GBP dropped below 0.8820 support on the BoE announcements, the 185 pip rally in cable was tempered by the Brexit concerns. The post-meeting statement, that, "...policy would need to be tightened somewhat earlier and to a somewhat greater extent" was a major upset for the bulls. However, a Brexit concern correction in the cross moved the price back to the 100 4hr SMA and the bulls have been constructive above there since with a strong bid on Friday's closing sessions. For the day ahead, the data remains light but we do have MPC's Ian McCafferty, ('uber-hawk'), making a speech at 16.30GMT. This follows a comment from earlier,"If there is less credit headwind to UK economy, then maybe ready for higher rates," coming from BoE's Vlieghe (a dove) when speaking on a panel discussion on household debt on Monday.
EUR/GBP levels
Bears need to close below 0.8770 ahead of the December and January lows at 0.8689/87 while bulls look for the top of a shallow channel at 0.8962 through 0.8936 January high and the 0.9034 October 2017 high ahead of 0.9071/0.9175 61.8% and 78.6% Fibonacci retracements.