Eur-gbp
EURGBP Expectations: UK Inflation and BoE's Decision this WeekOn Monday, the pound reached its highest level against the euro in 10 months, at 85.25 pence, as investors await the British inflation data and the upcoming Bank of England decision. However, the currency pair quickly rebounded to the support level of the previous week, at 85.42 pence, but is perhaps now tracking down again.
In recent weeks, the sterling has experienced a rallied against the EUR and USD (particularly against the USD, marking its largest weekly gain since December 2022). This surge can be attributed to economic data suggesting that inflation in Britain is more persistent compared to the United States and Europe. As a result, traders have started factoring in more interest rate hikes from the Bank of England, leading to increased yields on British government bonds and bolstering the pound. Additionally, investors' expectations have been heightened by recent data showing a faster-than-anticipated growth in British wages.
Currently, the pound is down 0.26% against the dollar, trading at $1.278. However, it remains close to the 14-month high of $1.285 reached on Friday.
British inflation data is scheduled to be released on Wednesday. Economists predict that the headline Consumer Price Index will have slightly cooled to 8.5% year-on-year, down from 8.7% in April. However, they anticipate that the core CPI, which excludes volatile food and energy costs, will remain steady at 6.8%. If these figures align with expectations, the pound could strengthen further due to the anticipation of additional interest rate increases by the Bank of England. Nevertheless, any unexpected results could introduce volatility into the market, and perhaps validate the recent rebound in the EUR.
On Thursday, the Bank of England will announce its decision on interest rates, with investors and economists expecting a 25 basis point hike to 4.75%. There is little uncertainty surrounding this decision, so traders will closely examine the bank's forward guidance. Indications of future interest rate hikes are likely to bolster the GBP.
EUR GBP - FUNDAMENTAL ANALYSISBNP Paribas 2023-2024 Exchange Rate Forecasts
Euro Can Secure Capital Inflows
The bank maintains a broadly constructive stance towards the Euro.
It expects that the ECB rate hikes and quantitative tightening will encourage foreign inflows and domestic repatriation.
Although BNP expects that energy prices will strengthen, it does not expect a return to 2021 levels.
Overall, the bank expects gradual EUR/USD gains over the medium term.
Pound Vulnerable on Weak UK Fundamentals
BNP expects that the Bank of England (BoE) will have to increase interest rates further, but does not consider that market expectations of rate hikes to 5.75% will be met which will sap currency support.
It also considers that the BoE is in a no-win situation.
Even if the central bank continues to raise rates, BNP also expects that market confidence in Sterling would suffer to the perception of a long-term inflation problem.
It adds; “Both of these developments would be GBP-negative, in our view.”
The bank also maintains a negative stance on UK fundamentals. It adds; “We expect GBP to remain structurally weak due to UK growth underperforming its peers, remaining below-trend, and its persistent current-account deficit that requires foreign funding.”
Overall, BNP expects that the Euro to Pound (EUR/GBP) exchange rate will trade close to 0.88 during the forecast period.
EURGBP:GBP continues to outperform EURO.Hey Traders, in the upcoming week, our attention will be focused on monitoring EURGBP for a potential selling opportunity in the vicinity of the 0.85800 zone. EURGBP is currently engaged in a downtrend, and our strategy entails awaiting a corrective phase to evaluate the likelihood of a rejection of the prevailing trend within the support and resistance region around 0.85800.
EURGBP to 0.85? Anyone else with me?Hey Traders! 👋
For Day 30/100 of our challenge, we will look at EURGBP for downside potential this week/month
Technicals:
- Overall downtrend
- Break below 0.858 support
- Support created at 0.0.854
- Expecting retest back to 0.858 for potential shorts
- Or a break and retest of 0.854
- Target is 0.85
- Invalid thesis when 0.861 is breached to the upside
Fundamentals
- Expecting less room for ECB to rate hikes; they will this month by 25bp but sound less hawkish
- Expecting GBP to be stronger given better domestic data and an aggressive peak rate pricing
That's all for today. Forecasts these week on TradingView has been awesome.
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EURGBP Potential DownsidesHey Traders, in the coming week we are monitoring EURGBP for a selling opportunity around 0.859 zone, EURGBP was trading in a downtrend and successfully managed to break it out. Currently we are waiting for a correction in order to see a potential retrace of the trend towards more lows especially with current BoE hawkish sentiments.
Trade safe, Joe.
EUR GBP - FUNDAMENTAL ANALYSIS2023-2024 Exchange Rate Forecasts From MUFG
Pound Sterling: BoE Forecasting Errors Increase GBP Risk Profile
MUFG has significant reservations surrounding the Pound outlook.
As far as inflation is concerned, it sees significant risks over the medium-term implications.
It notes; “The sense that the UK has a bigger inflation problem is creating downside risks for the pound that may see a period of underperformance if the evidence continues to suggest this.”
MUFG also notes problems with the bank’s model failure to forecast higher inflation.
According to the bank; “BoE Governor Bailey stated that it was no longer following the information from the model which will only exacerbate risks of policy errors and the potential for a bigger inflation problem in the UK.”
Overall, MUFG expects a mixed outlook for the Pound, especially as it expects UK yields will decline amid weak credit demand and evidence of weaker employment.
It expects the downgrading of BoE rate expectations will hurt the Pound against the Euro with EUR/GBP forecast at 0.90 in 12 months.
EURGBP Potential DownsidesHey Traders, in today's trading session we are monitoring EURGBP for a selling opportunity around 0.86500 zone, EURGBP is trading in a downtrend and currently seems to be in a correction phase in which it is approaching the major trend at 0.86500 support and resistance zone.
Trade safe, Joe.
EURGBP Excellent buy opportunityEURGBP is rebounding after hitting Support (1) which was last touched on December 13th 2022.
This is a short-term buy opportunity but the long term trend remains bearish, not only due to the Falling Resistance since February but also 3rd but also due to the formation of a Death Cross (1d), the first since Jnuary 21 2021.
Trading Plan:
1. Buy on the current market price.
Targets:
1. 0.87150 (Resistance 1) and estimated contact with the MA50 (1d).
Tips:
1. The RSI (1d) is trading under a Falling Resistance, same as February through March. I made a reversal after touching the oversold level of 30.00. This is a strong additionl reason to buy on the short term.
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Notes:
Past trading plan:
EG potential turning point, watching only
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EURGBP Potential DownsidesHey Traders, in today's trading session we are monitoring EURGBP for a selling opportunity around 0.86300 zone, EURGBP was trading in an uptrend and successfully managed to break it out. Currently EURGBP seems to be in a correction phase in which it is approaching the retrace area at 0.86300 support and resistance area.
Trade safe, Joe.
Potential swing trade short on EUR/GBP EUR/GBP has just suffered its worst month in ten, thanks to renewed bets of a more-hawkish BOE and soft inflation reports across Europe. Volumes increased during the recent leg lower to show fresh bearish bets being placed and the OBV (on balance volume) has also confirmed the move lower on prices.
Prices are consolidating near the cycle lows on the 1-hour chart within a potential bear-flag pattern, and the flag projects an approximate target near the December low / daily S2 pivot point. A weak inflation report for the Eurozone later today could help send prices directly low.
However, should prices instead recycle higher first (which seems plausible given the magnitude of the bearish move) then bears could look to fade into the daily pivot point ~0.8610 or the volume cluster around 0.825.
Given the strength of the downtrend, we’d view a retracement higher as an opportunity to increase the potential reward to risk ratio.
EURGBP Oversold being a great buy opportunity.EURGBP is approaching a Triple Support combination: Support A (0.85500), the bottom of the Channel Down, and the 1day RSI's Channel Down bottom.
The 1day RSI is also oversold under 30.00.
As long as the price closes over Support A, buy and target the top of the Channel Down at 0.87500.
If it closes under Support A, sell and target Support B at 0.83700.
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EURGBP Forming the first 1D Death Cross since January 2021!The EURGBP pair is completing today the first Death Cross on the 1D time-frame since January 21 2021. That is a strong long-term bearish signal on its own. On the short-term though, the price just hit the bottom of its 5 month Channel Down, while the 1D RSI, which is also on a Channel Down, hit its own bottom while turning oversold (below 30.00) for the first time since March 10 2021.
As a result, we've opened a buy on EURGBP, expecting a +1.69% rise, targeting the top of the Channel Down at 0.87150. If however the price closes below Support 1 (0.85475), then the selling pressure due to the 1D Death Cross will most likely pile up and we will turn bearish instead, targeting Support 2 (0.84100). The R/R ratio on this action plan is very favorable.
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EURGBP:will GBP continue outperforming EURO?Hey Traders, in today's trading session we are monitoring EURGBP for a selling opportunity around 0.86500 zone, EURGBP broke an important support level and currently we are waiting for a correction in order to see a potential retrace of the break out towards more lows.
Trade safe, Joe.
EURGBP: Could we see a new breakout? Today's focus: EURGBP
Pattern – Range/Descending Triangle
Possible targets – .8600
Support – .8670
Resistance – .8705
Today’s update, will we see the EURGBP make a new push lower, confirming its descending triangle pattern? Price broke the main trend setting up its first leg lower. From that point, we have seen a consolidation set-up with a bearish pattern in the mix. Descending triangle patterns are seen as bearish patterns if they are set up in a new decline. So far, we have the new decline, but we need to see if sellers can confirm the pattern with a breakout through .8670 support.
If today’s rally fails to fade and if we see a new rally through range resistance, this will be a worry and could be telling that the pattern could fail.
Let’s see over today and tomorrow if sellers can regain control and maybe set up a confirmation.
Thanks for stopping by. Good trading, and have a great day.
EURGBP: EURO Struggles to outperform GBPHey Traders, in today's trading session we are monitoring EURGBP for a selling opportunity around 0.87 zone, EURGBP is trading in a downtrend and we have noticed a fake out, price got below the trend again and currently in a correction phase in which it is approaching the major trend at 0.87 support and resistance zone.
Trade safe, Joe.
✨ NEW: EURGBP...DT (1M/16H) ✨ POSITION TRADE ✨✨ NEW: EURGBP...DT (1M/16H) ✨ POSITION TRADE ✨
SLO1 @ 0.8830 ⏳
SLO2 @ 0.8815 ⏳
TP1 @ 0.8375 (shaving 25%)
TP2 @ 0.8040 (shaving 25%)
TP3 @ 0.7515 (shaving 25%)
TP4 @ 0.7200 (closing ALL Sell Orders)
BLO1 @ 0.7085 ⏳
BLO2 @ 0.7015 ⏳
As of today, May 25, 2023, the EURGBP pair is trading at 0.8669. The pair has been in a downtrend since the beginning of the year, and a few factors are contributing to this trend.
First, the European Central Bank (ECB) has been more cautious about raising interest rates than the Bank of England (BoE). The ECB is worried about the impact of higher interest rates on the Eurozone economy, which is still recovering from the COVID-19 pandemic. The BoE, on the contrary, is more concerned about inflation and has raised interest rates several times in recent months. This monetary policy difference makes the pound more attractive than the euro.
Second, the UK economy is doing better than the Eurozone economy. The UK economy grew by 0.8% in the first quarter of 2023, while the Eurozone economy grew by only 0.2%. This growth differential is making the pound more attractive than the euro.
Third, the war in Ukraine is also weighing on the euro. The war has caused uncertainty in the global economy, and investors are looking for safe-haven assets, such as the pound.
The fundamental factors point to a continued decline in the EURGBP pair. However, it is essential to remember that the market is unpredictable, and there is always the possibility of a reversal.
EURGBP: Near its bottom. Long term Buy.EURGBP is consolidating under the 1D MA200 for the 11th consecutive day which keeps the 1D time-frame near neutrality, despite the marginally red technical indicators (RSI = 43.260, MACD = -0.003, ADX = 36.781). This is a standard bottom formation and since the 1D RSI is rising after hitting the Channel's bottom, the signal gets stronger.
The standard rally inside this Channel Up that extends for more than 1 year, is +5.00%. We are extending our downside tolerance, assuming a potential bottom on the HL of the Channel Up, so taking a +5.00% rise from there gives us a bullish Target marginally over the 0.618 Fibonacci level. Our TP is 0.90200.
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