24 Sep 2013
EUR/GBP struggles to maintain the 0.8400 support
FXstreet.com (Athens)- The EUR/GBP is moving slightly upwards since the opening of the Asian trading session, after having being hit harshly the day before.
EUR/GBP above crucial support as of 0.84 ahead of UK Houses data
The EUR/GBP was severely wounded on Monday, losing approximately 30 pips but also touching-even not breaking- the 0.8400 support. Traders could well find some reasons for the pair trading behaviour, as Draghi was more dovish than widely expected, overstating that the Governing Council may implement another Long-Term Refinancing Operation (LTRO) to further insulate the monetary union. Elaborating on, this could be well translated as that the ECB may have little choice but to further embark on its easing cycle as the governments operating under the monetary union become increasingly reliant on monetary support and could not help move on without this support. Nevertheless, one could wonder why the EUR/GBP managed to sustain its support level as of 0.8400. Traders should try to bear in mind before answering to that question that, we might also see a sharp downward pressure on EUR/USD, in order to have an analogous fall in the EUR/GBP.
Technical and Strategic Bias on EUR/GBP
Karen Jones, Head Technical Analyst at Commerzbank suggests that the EUR/GBP “is under pressure, but should find some support circa 0.8350. Also, EUR/GBP again sold off sharply, which has somewhat negated our fears over a rebound. The market has started to erode its 55 week ma at .8374 and despite the TD perfected set up and 13 count clearly remains vulnerable on the downside. The intraday charts indicate that this move should terminate circa .8350. Any rebounds will find initial resistance offered by the June low at .8470, the 200 day ma at .8497 and stronger resistance at .8515, the 38.2% Fibonacci retracement of the recent decline. Longer term the market has reversed from the top of a 4 year channel and longer term downside targets .8280/.8155/.7980 have been introduced (Fibonacci retracements of the move up from 2012)
EUR/GBP above crucial support as of 0.84 ahead of UK Houses data
The EUR/GBP was severely wounded on Monday, losing approximately 30 pips but also touching-even not breaking- the 0.8400 support. Traders could well find some reasons for the pair trading behaviour, as Draghi was more dovish than widely expected, overstating that the Governing Council may implement another Long-Term Refinancing Operation (LTRO) to further insulate the monetary union. Elaborating on, this could be well translated as that the ECB may have little choice but to further embark on its easing cycle as the governments operating under the monetary union become increasingly reliant on monetary support and could not help move on without this support. Nevertheless, one could wonder why the EUR/GBP managed to sustain its support level as of 0.8400. Traders should try to bear in mind before answering to that question that, we might also see a sharp downward pressure on EUR/USD, in order to have an analogous fall in the EUR/GBP.
Technical and Strategic Bias on EUR/GBP
Karen Jones, Head Technical Analyst at Commerzbank suggests that the EUR/GBP “is under pressure, but should find some support circa 0.8350. Also, EUR/GBP again sold off sharply, which has somewhat negated our fears over a rebound. The market has started to erode its 55 week ma at .8374 and despite the TD perfected set up and 13 count clearly remains vulnerable on the downside. The intraday charts indicate that this move should terminate circa .8350. Any rebounds will find initial resistance offered by the June low at .8470, the 200 day ma at .8497 and stronger resistance at .8515, the 38.2% Fibonacci retracement of the recent decline. Longer term the market has reversed from the top of a 4 year channel and longer term downside targets .8280/.8155/.7980 have been introduced (Fibonacci retracements of the move up from 2012)