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Eur-gbp

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.
Long
by thunderpips
6
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. Please like, follow and comment!! Notes: Past trading plan:
Long
by TradingBrokersView
9
EG potential turning point, watching only **Find out more from my Tradingview Stream this week** *************************************************************************************** Hello there! If you like my analysis and it helped you ,do give me a thumbs ups on tradingview! 🙏 And if you would like to show further support for me, you can gift me some coins on tradingview! 😁 Thank you! Disclaimers: The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes. The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared. Thank you, and please do your due diligence before any putting on any trades!
Long
by Shadowing_The_Big_Boys
1
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.
Short
by CityIndex
12
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. ------------------------------------------------------------------------------- ** Please LIKE 👍, FOLLOW ✅, SHARE 🙌 and COMMENT ✍ if you enjoy this idea! Also share your ideas and charts in the comments section below! ** ------------------------------------------------------------------------------- 💸💸💸💸💸💸 👇 👇 👇 👇 👇 👇
Long
by TradingShot
5
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.
Short
by Eightcap
✨ 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.
Short
by ProfessorCEWard
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. ## If you like our free content follow our profile to get more daily ideas. ## ## Comments and likes are greatly appreciated. ##
Long
by InvestingScope
6
Eurgbp more bias on the downside **Find out more from my Tradingview Stream this week** *************************************************************************************** Hello there! If you like my analysis and it helped you ,do give me a thumbs ups on tradingview! 🙏 And if you would like to show further support for me, you can gift me some coins on tradingview! 😁 Thank you! Disclaimers: The analysis shared through this channel are purely for educational and entertainment purposes only. They are by no means professional advice for individual/s to enter trades for investment or trading purposes. The author/producer of these content shall not and will not be responsible for any form of financial/physical/assets losses incurred from trades executed from the derived conclusion of the individual from these content shared. Thank you, and please do your due diligence before any putting on any trades!
Short
by Shadowing_The_Big_Boys
EUR GBP - FUNDAMENTAL ANALYSISThe Pound to Dollar (GBP/USD) exchange rate hit 12-month highs at 1.2675 on May 10th before a retreat to 1.2400 amid a dollar rebound. The Pound to Euro (GBP/EUR) exchange rate also hit 2023 highs close to 1.1550 before settling just above 1.1500. Pound Sterling: UK Outlook Half Full or Half Empty The UK fundamentals have improved over the past few months with an important boost from lower energy prices. Markets assume that the UK government is now embracing convention policies, increasing the importance of monetary policies. The latest UK GfK consumer confidence data recorded a further improvement to a 15-month high. Although the PMI data records a further contraction, there has been further expansion in services. The Bank of England now forecasts limited growth for 2023 and 2024 and abandoned its call of a shallow and extended recession. According to HSBC; “We no longer see a recession, and are now forecasting a rise of 0.4% in GDP in 2023. While this looks very poor compared with 2022’s 4.1%, in fact, it’s an acceleration.” The UK economy has, however, continued to under-perform in global terms. GDP is still 0.5% below the pre-covid peak and the worst performance in the G10 area. According to Rabobank; “It is our view that GBP’s gains since early March suggest that a lot of better news regarding UK fundamentals is already baked into the price. It added; “However, there is a strong distinction between ‘better’ and ‘strong’ fundamentals, and the UK continues to fall significantly short of the latter measure. According to MUFG; “UK Economic resilience helped by the improved energy terms of trade will help provide support and improve the UK’s trade and fiscal position which will further help provide support for the pound.” Bank of England Watching Inflation Very Closely The Bank of England (BoE) increased interest rates by a further 25 basis points to 4.50% at the May policy meeting. The headline inflation rate will inevitably decline sharply in the short term, primarily due to base effects. The latest inflation data will be published on May 24th. Consensus forecasts are for the headline rate to decline to 8.2% from 10.1% due to the fact that prices surged last April due to the increases in energy prices. The core rate is expected to be more stubborn with a small decline to 6.1% from 6.2%. The Bank of England is concerned that underlying inflation pressures will persist and potentially force further interest rate hikes. According to ING; “We continue to think that further tightening is unlikely. Wage disinflation can allow the BoE to pause at its 22 June meeting.” Goldman Sachs is more positive surrounding the Pound and more hawkish surrounding the BoE. It notes; “Despite being vulnerable to further bouts of risk-off, we remain constructive on Sterling, especially after the latest BoE meeting. Goldman adds; “While the Bank’s significant forecast upgrades to growth and inflation present a higher bar for the incoming data to beat, it also reflects the risk of higher inflation persistence that would require additional monetary policy tightening. Goldman expects that the BoE will raise rates to 5.0%. BNPP expects the medium-term BoE stance will be more dovish; “We remain of the view that the BoE will begin easing through Q1 2024, and at 3.5% we have a significantly lower end-2024 expectation on Bank Rate than the market (around 42bp higher). This adds to our view that there is a hawkish mispricing, especially as we move into the first quarter of next year.” To some extent, the BoE is caught in the middle of the ECB and Federal Reserve inflation battles. According to BNPP; “The ECB is the most hawkish in that it has retained a clear bias for further tightening. The Fed, by contrast, has more explicitly signalled a bias to pause. We think the BoE has a bias to tighten further, but it is by no means explicit.” ECB Committed to Inflation Fight The ECB increased interest rates by a further 25 basis points at the May meeting with the refi rate at 3.75%. The bank remains committed to battling inflation but has not provided guidance on further rate hikes. Nordea expects that the ECB will maintain a hawkish stance; “The economy has been holding up relatively well, the labour market remains hot and with services inflation still accelerating in April, the ECB is lacking evidence of inflation returning to target in a timely manner. We think the ECB will hike rates by 25bp in both June and July.” Nordea expects that GBP/EUR will weaken to 1.11 at the end of 2023 with a further slide to 1.08 at the end of 2024. Lower Gas Prices still Euro Positive MUFG notes; “After a period of strong outperformance, cyclical stocks are now underperforming again. Is this a reflection of bad news emerging or more a reflection of excessive optimism correcting back to a more realistic level? The bank points to a further decline in gas prices with European prices trading close to 2-year lows. In this context, it adds; “For now we would be in the latter camp with no real deterioration in the data or news flow to warrant a reassessment of the outlook.” MUFG expects lower energy prices will support the UK and Euro-Zone outlooks. In this context, it has an end-2023 GBP/EUR forecast of 1.14. Danske Bank expects that GBP/EUR will trade in a 1.14-1.15 range for much of the time due to similar fundamentals. Federal Reserve Stance Crucial The Federal Reserve increased interest rates by a further 25 basis points to 5.25% at the May policy meeting. The central bank did adjust its rhetoric and suggested that there may be a pause at the June meeting to assess developments. The Fed has consistently stated that interest rates are not expected to be cut this year. There is an important divergence in investment bank interest rate forecasts. Danske Bank expects that the Fed will not cut rates and that tighter financial conditions will underpin the dollar. It adds; “In line with market expectations, we think the Fed has delivered its last rate hike for this hiking cycle. However, we think the current 65bp of rate cuts priced for the rest of the year is too aggressive.” ING, however, expects the economy will deteriorate more sharply over the second half of the year and this will force the Fed to cut rates more aggressively. The bank expects that the Fed will cut interest rates by 100 basis points by the end of 2023. These interest rate expectations are crucial in determining dollar forecasts and the GBP/USD outlook. According to ING; “Based on our overall dollar view, GBP/USD should be heading higher this year. 1.33 is our target for year-end.” Danske Bank, however, expects the Federal Reserve stance and tightening financial conditions will undermine the Pound. It has a 6-month GBP/USD forecast of 1.20 and a 12-month forecast of 1.17. Rabobank has a 3-month GBP/USD forecast of 1.22.
Long
by thunderpips
EUR GBP - FUNDAMENTAL ANALYSISForeign exchange analysts at BNP Paribas suggest the Euro (EUR) is tipped to rise against the Pound Sterling (GBP) in the near-term outlook. They believe that although UK data has been surprisingly strong recently, the underlying data strength remains subdued. "UK data have been surprisingly strong recently, but surprises tend to mean revert and underlying data strength remains subdued," says Oliver Brennan, FX Volatility Strategist at BNP Paribas. The analyst says, "Short-GBP positioning has also been a tailwind for GBP this year. But now that the client survey component of GBP positioning – a proxy of real-money positioning – has flipped from short to long, the positioning backdrop may be clean." Euro to Pound (EURGBP) Exchange Rate Tipped to Gain Although UK data has shown unexpected strength, the overall vigour of the data remains low. The analyst suggests a mean reversion tendency in the data surprises, hinting at a likely change of course. Additionally, the shift in GBP positioning from short to long suggests a fresh slate for the currency's performance, presenting an attractive opportunity for GBP short positions. The analyst also anticipates a singular additional hike at the Bank of England's forthcoming meeting, but sees the risk leaning more towards no change than a hawkish shift. He notes, "We expect one further hike at the Bank of England’s next meeting, but the risk is skewed more towards no change than towards a more-hawkish shift." However, Brennan emphasises the importance of timing in entering GBP short positions, given the positive GBP carry and the uncertainty surrounding the weakening economy's potential impact on the Bank of England's stance. "All the above factors support re-entering short GBP positions. But the combination of positive GBP carry and uncertainty around when a weakening economy may trigger a change in BoE stance means timing the weakness is as important as identifying the opportunity," Brennan adds. Brennan proposes a trade strategy that seeks to capitalise on this analysis by initiating a long EURGBP position via a digital call with a knockout above the recent range high. He explains, "We structure a long EURGBP position via a digital call with knockout above the recent range high. The knockout makes the structure less than half the equivalent single digital premium. Theta is positive at inception, and the structure decays shorter-GBP delta over time." Despite the current low level of implied volatility in Euro to Pound exchange rate (EURGBP), which is in line with most G10 FX pairs over the past month, Brennan cautions that it is not yet a cheap currency.
Long
by thunderpips
1
EUR GBP - FUNDAMENTAL ANALYSISPound Sterling Forecast: Extended Range Trading for EUR/GBP Danske expects that the Bank of England will increase interest rates for a final time in June. It notes that at least one further rate hike is priced in by markets which will limit scope for Pound buying. It does, however, consider that the Pound is slightly undervalued which will underpin the currency. Overall, the bank summarises; “At present, we do not see the relative growth outlook or global investment environment to create significant divergence between EUR and GBP. We thus expect the cross to remain range bound around 0.87-0.88.”
Long
by thunderpips
EUR GBP - FUNDAMENTAL ANALYSISForeign exchange analysts at ING have updated their latest currency forecasts and predictions for the Pound Sterling Sterling will be influenced by global economic and financial conditions. It notes; “Sterling’s correlation with risk assets has fallen a lot this year – a factor probably helping sterling at the moment.” The Pound will still tend to be vulnerable if global risk conditions deteriorate. The principal element behind ING’s Sterling call is that the Bank of England (BoE) interest rates have reached a peak at 4.50%. Overall, it expects that signs of moderation in inflation and a tighter labour market will allow the BoE to avoid further rate increases. In this context, it expects a BoE re-pricing and lower yields will undermine the Pound. It adds; “If we’re right with our BoE call, EUR/GBP should be trading towards 0.88 by the end of June. We suspect that the effects of prior tightening will start to show up, via higher mortgage refinancing costs, in 2H23 and pitch a weak UK activity story.” EUR/GBP is forecast to strengthen to 0.90 on a 6-12 month view.
Long
by thunderpips
3