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Eur-gbp

EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE The EUR has had a bumpy ride over the past few months. At the onset of the war in Ukraine the EUR tumbled across the board. However, in recent weeks, the persistently high inflation has seen the ECB take a more hawkish turn with the bank confirming at least a 25bsp hike for July and possibility of a 50bsp hike in September. Despite the hawkish policy shift, the concerns over fragmentation in bond spreads (BTP\Bund) as well as fears of growing stagflation risks has seen the EUR struggle to hold onto any hawkish ECB momentum. The ECB did try to comfort spread concerns with promises of a new fragmentation tool, and even though it has kept spread from widening further, concerns remain. If the bank can convince markets that their new spread tool(s) can stop fragmentation it should be supportive for the EUR. The bank did back up their attempts at calming fragmentation fears after an ad-hoc meeting by saying they are looking at introducing an additional ‘tool’ as quick as possible, so markets will be focused on any insights into what that tool might be. Even though growth data has been surprisingly resilient in the past few months, the recession fears ramped up growth data continuing to surprise lower for key EU countries like Germany and France. Based on the forward-looking signals from leading indicators we think recession is likely in the EZ and that the narrative will turn more bearish for the EUR in the weeks ahead. POSSIBLE BULLISH SURPRISES Geopolitics remains a focus for the EUR, where any possible de-escalation or cease fire in the Ukraine war would open up a lot of appreciation for the EUR. Stagflation fears are high right now for the Eurozone, with growth expected to slow while inflation stays persistently high. Recent PMI data has invigorated recession fears, which means any materially better-than-expected growth data could spark some upside for the single currency. Even though the ECB’s recent communication has been enough to push BTP/ Bund spreads from their recent highs the concerns remain. Thus, any insights, clarity regarding their new tools that convinces markets it can solve fragmentation should be supportive for the USD. POSSIBLE BEARISH SURPRISES Spread fragmentation remains in focus, and if ECB speak in the week ahead fails to calm fears or walks back on recent hawkish comments it could trigger bearish reactions in the EUR. Flash PMIs confirmed growth risks in the EU is very much alive, we expect growth concerns to continue weighing on the EUR and means incoming growth data will be in focus. Watch those hike expectations. With a lot of froth recent baked into STIR markets for the ECB, we've seen a chunky repricing in hike expectations and any further lower repricing is expected to weigh on the single currency. BIGGER PICTURE The fundamental outlook for the EUR has shifted to bearish with recent leading indicators pointing to a much faster economic slowdown than markets had previously expected. On the bearish side we have geopolitics, stagflation and spread fragmentation acting as negative drivers. But we also have hawkish ECB policy as a possible supportive driver. The disappointing data does open up a potential narrative change for EURGBP as well as the EURJPY so key pairs to keep on the radar in weeks ahead. GBP FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE The overall bleak economic outlook for the UK, with exceptionally high Inflation and rapidly falling growth have been the biggest negative driver for Sterling. With rising price pressures and falling demand, the risks of stagflation has risen substantially, so much so that the BoE have forecasted a possible recession for the UK economy heading into 2023. At their June meeting the bank followed through with their more moderate approach by hiking 25bsp instead of growing calls of a potential 50bsp hike. The BoE is stuck between a rock and a hard place, right now they have to hike rates to try and fight inflation but by doing so they risk further damaging economic growth as a result. Even though the June statement was dovish, it wasn’t materially more dovish compared to their previous meeting. The price action was a clear warning sign that a lot of negatives has been priced in for Sterling in recent weeks so chasing lower is very risky right now. It also means we would favour upside opportunities on solid bullish short-term catalysts. POSSIBLE BULLISH SURPRISES Stagflation fears are very high for the UK, with probabilities of recession growing by the week. With so much bad news priced in, incoming news risk is asymmetrical, meaning positive surprises in growth data could trigger strong bullish reactions. The UK is facing one of its biggest cost of living squeezes in history, lower-than-expected inflation could counterintuitively be a positive driver for the currency (lower CPI means less stagflation risk). The economy needs help right now, which means any help from the fiscal side will be a positive. Any major fiscal support measures to help consumers (subsidies for energy or tax cuts) could trigger bullish reactions for the Pound. We have lots of BoE speak next week, and any overly hawkish comments signalling more aggressive policy than what markets are currently pricing in could trigger bullish GBP reactions. POSSIBLE BEARISH SURPRISES Monetary policy is a double-edged sword for the GBP. Odds that the BoE has limited hikes left has been a negative driver, but so too is risks that inflation forces them to hike even more and further damage GDP. Further stagflation risks from higher gas prices or CPI prints could trigger bearish reactions. Politics is also in focus, where any attempts to oust PM Johnson by changing no-confidence laws could trigger bearish reactions. GBP is usually sensitive to political uncertainty and anything that raises odds of a snap election should be negative. With UK threats of triggering Article 16 and EU threats to terminate the Brexit deal if they do Brexit is in focus again. For now, markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. We have lots of BoE speak next week, and any overly dovish comments signalling less aggressive policy than what markets are currently pricing in could trigger bearish GBP reactions. BIGGER PICTURE The fundamental outlook for the GBP remains fairly bleak right now with the economic prospects and risk of stagflation keeping the currency pressured. Anything that exacerbates stagflation fears is expected to weigh on the Pound and anything that alleviates some of that pressure should be positive. Positioning has been looking stretched to the downside, so any new shorts do need to be weary of the risk of some mean reversion, and also means we would favour upside on strong bullish catalysts.
by thunderpips
1
EURGBP can move lower? 🦐EURGBP on the 4h chart is trading over a weekly support. The price after the break and retets of the ascending trendline is now looking for a possible lower low. How can i approach this scenario? I will wait for the EU market open and if the price will break below support area i will check for a nice short order according to the Plancton's strategy rules. ––––– Follow the Shrimp 🦐 Keep in mind. 🟣 Purple structure -> Monthly structure. 🔴 Red structure -> Weekly structure. 🔵 Blue structure -> Daily structure. 🟡 Yellow structure -> 4h structure. ⚫️ Black structure -> <4h structure. Here is the Plancton0618 technical analysis , please comment below if you have any question. The ENTRY in the market will be taken only if the condition of the Plancton0618 strategy will trigger.
Short
by InkyGrip
4
EURGBP Bullish with 1D MA60 holdingThe EURGBP pair has been trading exactly as our last analysis projected on May 24: The Channel Up on the 1D time-frame continues to be dominant after the bearish trend of 2021 broke. Key highlight is that the 1D MA50 (blue trend-line) has been holding since the price broke above on April 22 and today is going for a test. As long as it holds, the price remains bullish short-term towards the 1W MA200 (red trend-line), which is the Resistance as it had a perfect rejection on June 15. A break above it is bullish towards the Higher Highs (top) trend-line of the Channel Up, while a break below the pattern and the 1D MA50 is bearish short-term towards the 1D MA200 (orange trend-line). A 1D candle close below the 1D MA200 (orange trend-line) could restore the bearish trend on the long-term. It is worth noticing the 1D MACD band squeeze since late May. The last time it happened was in May 2021 and was at the start of the Bearish Megaphone. We can claim that this formation is an accumulation pattern that favors the dominant trend each time. -------------------------------------------------------------------------------------------------------- ** Please support this idea with your likes and comments, it is the best way to keep it relevant and support me. ** --------------------------------------------------------------------------------------------------------
Long
by TradingShot
2
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE The EUR has had a bumpy ride over the past few months. At the onset of the war in Ukraine the EUR tumbled across the board. However, in recent weeks, the persistently high inflation has seen the ECB take a more hawkish turn with the bank confirming at least a 25bsp hike for July and possibility of a 50bsp hike in September. Despite the hawkish policy shift, the concerns over fragmentation in bond spreads (BTP\Bund) as well as fears of growing stagflation risks has seen the EUR struggle to hold onto any hawkish ECB momentum. The ECB did try to comfort spread concerns with promises of a new fragmentation tool, and even though it has kept spread from widening further, concerns remain. If the bank can convince markets that their new spread tool(s) can stop fragmentation it should be supportive for the EUR. The bank did back up their attempts at calming fragmentation fears after an ad-hoc meeting by saying they are looking at introducing an additional ‘tool’ as quick as possible, so markets will be focused on any insights into what that tool might be. Even though growth data has been surprisingly resilient in the past few months, the recession fears ramped up when EU Flash PMIs showed a material deceleration in growth. Incoming growth data will be watched carefully after this and any further signs that the deterioration in growth is gaining momentum should weigh on the EUR. POSSIBLE BULLISH SURPRISES Geopolitics remains a focus for the EUR, where any possible de-escalation or cease fire in the Ukraine war would open up a lot of appreciation for the EUR. Stagflation fears are high right now for the Eurozone, with growth expected to slow while inflation stays persistently high. Recent PMI data has invigorated recession fears, which means any materially better-than-expected growth data could spark some upside for the single currency. Even though the ECB’s recent communication has been enough to push BTP/ Bund spreads from their recent highs the concerns remain. Thus, any insights, clarity regarding their new tools that convinces markets it can solve fragmentation should be supportive for the USD. POSSIBLE BEARISH SURPRISES Spread fragmentation remains in focus, and if ECB speak in the week ahead fails to calm fears or walks back on recent hawkish comments it could trigger bearish reactions in the EUR. Flash PMIs confirmed growth risks in the EU is very much alive, we expect growth concerns to continue weighing on the EUR and means incoming growth data will be in focus (in the week ahead we have Final Services PMIs, German Factory Orders and German Industrial Production to keep on the radar). Watch those hike expectations. With a lot of froth recent baked into STIR markets for the ECB, we've seen a chunky repricing in hike expectations and any further lower repricing is expected to weigh on the single currency. BIGGER PICTURE The fundamental outlook for the EUR remains neutral, teetering on bearish with positive and negative forces in play. On the bearish side we have geopolitics, stagflation and spread fragmentation acting as negative drivers. But we also have hawkish ECB policy as a supportive driver. That means our preferred way of trading the EUR right now is taking short-term plays which are driven by clear short-term bearish or bullish catalysts. The disappointing PMI data does open up a potential narrative change for EURGBP and we are currently positioned for some potential downside in the pair. GBP FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE The overall bleak economic outlook for the UK, with exceptionally high Inflation and rapidly falling growth have been the biggest negative driver for Sterling. With rising price pressures and falling demand, the risks of stagflation has risen substantially, so much so that the BoE have forecasted a possible recession for the UK economy heading into 2023. At their June meeting the bank followed through with their more moderate approach by hiking 25bsp instead of growing calls of a potential 50bsp hike. The BoE is stuck between a rock and a hard place, right now they have to hike rates to try and fight inflation but by doing so they risk further damaging economic growth as a result. Even though the June statement was dovish, it wasn’t materially more dovish compared to their previous meeting. The price action was a clear warning sign that a lot of negatives has been priced in for Sterling in recent weeks so chasing lower is very risky right now. It also means we would favour upside opportunities on solid bullish short-term catalysts. POSSIBLE BULLISH SURPRISES Stagflation fears are very high for the UK, with probabilities of recession growing by the week. With so much bad news priced in, incoming news risk is asymmetrical, meaning positive surprises in growth data could trigger strong bullish reactions. The UK is facing one of its biggest cost of living squeezes in history, lower-than-expected inflation could counterintuitively be a positive driver for the currency (lower CPI means less stagflation risk). The economy needs help right now, which means any help from the fiscal side will be a positive. Any major fiscal support measures to help consumers (subsidies for energy or tax cuts) could trigger bullish reactions for the Pound. We have lots of BoE speak next week, and any overly hawkish comments signalling more aggressive policy than what markets are currently pricing in (see our Rate Tracker for STIR expectations) could trigger bullish GBP reactions. POSSIBLE BEARISH SURPRISES Monetary policy is a double-edged sword for the GBP. Odds that the BoE has limited hikes left has been a negative driver, but so too is risks that inflation forces them to hike even more and further damage GDP. Further stagflation risks from higher gas prices or CPI prints could trigger bearish reactions. Politics is also in focus, where any attempts to oust PM Johnson by changing no-confidence laws could trigger bearish reactions. GBP is usually sensitive to political uncertainty and anything that raises odds of a snap election should be negative. With UK threats of triggering Article 16 and EU threats to terminate the Brexit deal if they do Brexit is in focus again. For now, markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. We have lots of BoE speak next week, and any overly dovish comments signalling less aggressive policy than what markets are currently pricing in (see our Rate Tracker for STIR expectations) could trigger bearish GBP reactions. BIGGER PICTURE The fundamental outlook for the GBP remains fairly bleak right now with the economic prospects and risk of stagflation keeping the currency pressured. Anything that exacerbates stagflation fears is expected to weigh on the Pound and anything that alleviates some of that pressure should be positive. Positioning has been looking stretched to the downside, so any new shorts do need to be weary of the risk of some mean reversion, and also means we would favour upside on strong bullish catalysts.
by thunderpips
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE The EUR has had a bumpy ride over the past few months. At the onset of the war in Ukraine the EUR tumbled across the board. However, in recent weeks, the persistently high inflation has seen the ECB take a more hawkish turn with the bank confirming at least a 25bsp hike for July and possibility of a 50bsp hike in September. Despite the hawkish policy shift, the concerns over fragmentation in bond spreads (BTP\Bund) as well as fears of growing stagflation risks has seen the EUR struggle to hold onto any hawkish ECB momentum. The ECB did try to comfort spread concerns with promises of a new fragmentation tool, and even though it has kept spread from widening further, concerns remain. If the bank can convince markets that their new spread tool(s) can stop fragmentation it should be supportive for the EUR. The bank did back up their attempts at calming fragmentation fears after an ad-hoc meeting by saying they are looking at introducing an additional ‘tool’ as quick as possible, so markets will be focused on any insights into what that tool might be. Even though growth data has been surprisingly resilient in the past few months, the recession fears ramped up when EU Flash PMIs showed a material deceleration in growth. Incoming growth data will be watched carefully after this and any further signs that the deterioration in growth is gaining momentum should weigh on the EUR. POSSIBLE BULLISH SURPRISES Geopolitics remains a focus for the EUR, where any possible de-escalation or cease fire in the Ukraine war would open up a lot of appreciation for the EUR. Stagflation fears are high right now for the Eurozone, with growth expected to slow while inflation stays persistently high. Recent PMI data has invigorated recession fears, which means any materially better-than-expected growth data could spark some upside for the single currency. Even though the ECB’s recent communication has been enough to push BTP/Bund spreads from their recent highs the concerns remain. Thus, any insights, clarity regarding their new tools that convinces markets it can solve fragmentation should be supportive for the USD. POSSIBLE BEARISH SURPRISES Spread fragmentation remains in focus, and if ECB speak in the week ahead fails to calm fears or walks back on recent hawkish comments it could trigger bearish reactions in the EUR. Flash PMIs confirmed growth risks in the EU is very much alive, we expect growth concerns to continue weighing on the EUR and means incoming growth data will be in focus (in the week ahead we have Final Services PMIs, German Factory Orders and German Industrial Production to keep on the radar). Watch those hike expectations. With a lot of froth recent baked into STIR markets for the ECB, we've seen a chunky repricing in hike expectations and any further lower repricing is expected to weigh on the single currency. BIGGER PICTURE The fundamental outlook for the EUR remains neutral, teetering on bearish with positive and negative forces in play. On the bearish side we have geopolitics, stagflation and spread fragmentation acting as negative drivers. But we also have hawkish ECB policy as a supportive driver. That means our preferred way of trading the EUR right now is taking short-term plays which are driven by clear short-term bearish or bullish catalysts. The disappointing PMI data does open up a potential narrative change for EURGBP and we are currently positioned for some potential downside in the pair. GBP FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE The overall bleak economic outlook for the UK, with exceptionally high Inflation and rapidly falling growth have been the biggest negative driver for Sterling. With rising price pressures and falling demand, the risks of stagflation has risen substantially, so much so that the BoE have forecasted a possible recession for the UK economy heading into 2023. At their June meeting the bank followed through with their more moderate approach by hiking 25bsp instead of growing calls of a potential 50bsp hike. The BoE is stuck between a rock and a hard place, right now they have to hike rates to try and fight inflation but by doing so they risk further damaging economic growth as a result. Even though the June statement was dovish, it wasn’t materially more dovish compared to their previous meeting. The price action was a clear warning sign that a lot of negatives has been priced in for Sterling in recent weeks so chasing lower is very risky right now. It also means we would favour upside opportunities on solid bullish short-term catalysts. POSSIBLE BULLISH SURPRISES Stagflation fears are very high for the UK, with probabilities of recession growing by the week. With so much bad news priced in, incoming news risk is asymmetrical, meaning positive surprises in growth data could trigger strong bullish reactions. The UK is facing one of its biggest cost of living squeezes in history, lower-than-expected inflation could counterintuitively be a positive driver for the currency (lower CPI means less stagflation risk). The economy needs help right now, which means any help from the fiscal side will be a positive. Any major fiscal support measures to help consumers (subsidies for energy or tax cuts) could trigger bullish reactions for the Pound. We have lots of BoE speak next week, and any overly hawkish comments signalling more aggressive policy than what markets are currently pricing in (see our Rate Tracker for STIR expectations) could trigger bullish GBP reactions. POSSIBLE BEARISH SURPRISES Monetary policy is a double-edged sword for the GBP. Odds that the BoE has limited hikes left has been a negative driver, but so too is risks that inflation forces them to hike even more and further damage GDP. Further stagflation risks from higher gas prices or CPI prints could trigger bearish reactions. Politics is also in focus, where any attempts to oust PM Johnson by changing no-confidence laws could trigger bearish reactions. GBP is usually sensitive to political uncertainty and anything that raises odds of a snap election should be negative. With UK threats of triggering Article 16 and EU threats to terminate the Brexit deal if they do Brexit is in focus again. For now, markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. We have lots of BoE speak next week, and any overly dovish comments signalling less aggressive policy than what markets are currently pricing in (see our Rate Tracker for STIR expectations) could trigger bearish GBP reactions. BIGGER PICTURE The fundamental outlook for the GBP remains fairly bleak right now with the economic prospects and risk of stagflation keeping the currency pressured. Anything that exacerbates stagflation fears is expected to weigh on the Pound and anything that alleviates some of that pressure should be positive. Positioning has been looking stretched to the downside, so any new shorts do need to be weary of the risk of some mean reversion, and also means we would favour upside on strong bullish catalysts.
by thunderpips
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE The EUR has had a bumpy ride over the past few months. At the onset of the war in Ukraine the EUR tumbled across the board. However, in recent weeks, the persistently high inflation has seen the ECB take a more hawkish turn with the bank confirming at least a 25bsp hike for July and possibility of a 50bsp hike in September. Despite the hawkish policy shift, the concerns over fragmentation in bond spreads like the BTP\Bund spread as well as fears of growing stagflation risks has seen the EUR struggled to hold onto any real hawkish ECB momentum. The ECB did try to comfort spread concerns last week with an ad-hoc meeting and decided to use PEPP reinvestments as a way to calm fragmentation. But this wasn’t enough to calm concerns as reinvestment would amount to about €20 billion per month. However, the bank’s decision was enough to push the BTP\Bund down 50bsp, and if that trend can continue lower it should be supportive for the EUR. The bank did back up their attempts at calming fragmentation fears after their ad-hoc meeting by saying they are looking at introducing an additional ‘tool’ as quick as possible, so markets will be focused on any insights into what that tool might be. Even though growth data has been surprisingly resilient in the past few months, the recession fears ramped up this past week when EU Flash PMIs showed a material deceleration in growth. Incoming growth data will be watched carefully after this and any further signs that the deterioration in growth is gaining momentum should weigh on the EUR. POSSIBLE BULLISH SURPRISES Geopolitics remains a focus for the EUR, where any possible de-escalation or cease fire in the Ukraine war would open up a lot of appreciation for the EUR. Stagflation fears are high right now for the Eurozone, with growth expected to slow while inflation stays persistently high. Recent PMI data has invigorated recession fears, which means any materially better-than-expected growth data could spark some upside for the single currency. Inflation remains a key focus, which means the incoming Flash PMI prints on Friday will be important for interest rate expectations. A big upside surprise should be positive for the EUR, but there are risks that further upside in inflation which leads to higher rates also leads to further fragmentation risks. POSSIBLE BEARISH SURPRISES Spread fragmentation remains in focus, and if ECB speak in the week ahead fails to calm fears or walks back on recent hawkish comments it could trigger bearish reactions in the EUR. Flash PMIs confirmed growth risks in the EU is very much alive, we expect growth concerns to continue weighing on the EUR and means German & French retail sales will be in focus for the week ahead. Even though we expect EUR upside on big upside surprises for Friday’s flash CPI data, the secondary reaction might be negative. A CPI surprise that sparks further stagflation or spread fragmentation fears could see an initial upside reaction followed by immediate downside afterwards (which means be careful with this one) BIGGER PICTURE The fundamental outlook for the EUR remains neutral with positive and negative forces in play. On the negative side we have geopolitics, stagflation and spread fragmentation acting as negative drivers. But we also have hawkish ECB policy as a supportive driver. That means our preferred way of trading the EUR right now is taking short-term plays which are driven by clear shortterm bearish or bullish catalysts. The disappointing PMI data does open up a potential narrative change for EURGBP and we are currently positioned for some potential downside in the pair. GBP FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE The overall bleak economic outlook for the UK, with exceptionally high Inflation and rapidly falling growth have been the biggest negative driver for Sterling. With rising price pressures and falling demand, the risks of stagflation has risen substantially, so much so that the BoE have forecasted a possible recession for the UK economy heading into 2023. At their June meeting the bank followed through with their more moderate approach by hiking 25bsp instead of growing calls of a potential 50bsp hike. The BoE is stuck between a rock and a hard place, right now they have to hike rates to try and fight inflation but by doing so they risk further damaging economic growth as a result. Even though the June statement was dovish, it wasn’t materially more dovish compared to their previous meeting. The price action was a clear warning sign that a lot of negatives has been priced in for Sterling in recent weeks so chasing lower is very risky right now. It also means we would favour upside opportunities on solid bullish short-term catalysts. POSSIBLE BULLISH SURPRISES Stagflation fears are very high for the UK, with probabilities of recession growing by the week. With so much bad news priced in, incoming news risk is asymmetrical, meaning positive surprises in growth data could trigger bullish reactions. Furthermore, as the UK is facing one of its biggest cost of living squeezes in history, lower-than-expected inflation could counterintuitively be a positive driver for the currency (lower CPI means less stagflation risk). The economy needs help right now, which means any help from the fiscal side will be a positive. Any major fiscal support measures to help consumers (subsidies for energy or tax cuts) could trigger bullish reactions for the Pound. We have BoE’s Bailey and Cunliffe up next week, any overly hawkish comments signalling more aggressive policy than what markets are currently pricing in (see our Rate Tracker for STIR expectations) could trigger bullish GBP reactions. POSSIBLE BEARISH SURPRISES Monetary policy is a double-edged sword for the GBP. Odds that the BoE has limited hikes left has been a negative driver, but so too is risks that inflation forces them to hike even more and further damage GDP. Further stagflation risks from higher gas prices or CPI prints could trigger bearish reactions. Politics is also in focus, where any attempts to oust PM Johnson by changing no-confidence laws could trigger bearish reactions. GBP is usually sensitive to political uncertainty and anything that raises odds of a snap election should be negative. With UK threats of triggering Article 16 and EU threats to terminate the Brexit deal if they do Brexit is in focus again. For now, markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. We have BoE’s Bailey and Cunliffe up next week, any overly dovish comments signalling less aggressive policy than what markets are currently pricing in (see our Rate Tracker for STIR expectations) could trigger bearish GBP reactions. BIGGER PICTURE The fundamental outlook for the GBP remains fairly bleak right now with the economic prospects and risk of stagflation keeping the currency pressured. Anything that exacerbates stagflation fears is expected to weigh on the Pound and anything that alleviates some of that pressure should be positive. Tactically the GBP has been stretched to the downside, so any new shorts do need to be weary of the risk of some mean reversion as we saw after this past week’s BoE meeting.
by thunderpips
1
EURGBP: Important Decision Ahead 🇪🇺🇬🇧 What a peculiar situation on EURGBP: the pair has recently retraced from a key weekly structure. Being stuck within a rising wedge pattern, I see 2 potential scenarios: If the price breaks and closes above an underlined yellow resistance, I will expect a bullish continuation to 0.885. If the price breaks a support of the wedge to the downside on a daily, I will expect a bearish move to 0.85. Wait for a breakout and only then open a trading position. What do you expect? ❤️If you have any questions, please, ask me in the comment section. Please, support my work with like, thank you!❤️
Short
by VasilyTrader
7
EURGBP BULLISH OUTLOOKEUR is gaining in value due to the expectation that ECB will raise interest rates, something that had not happened in more than a decade. Against GBP the price broke the resistance of the triangle pattern on the 4H graph forming a bullish outlook, which, if gets confirmed, might see the price of the pair testing 0.87 On the other hand, if the bullish scenario does not come to fruition, the price will most likely test the support of the triangle at 0.8568 Risk Disclosure: Trading Foreign Exchange (Forex) and Contracts of Difference (CFD's) carries a high level of risk. By registering and signing up, any client affirms their understanding of their own personal accountability for all transactions performed within their account and recognizes the risks associated with trading on such markets and on such sites. Furthermore, one understands that the company carries zero influence over transactions, markets, and trading signals, therefore, cannot be held liable nor guarantee any profits or losses.
Long
by legacyFXofficial
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL OUTLOOK: NEUTRAL BASELINE The EUR has had a bumpy ride over the past few months. At the onset of the war in Ukraine the EUR tumbled across the board. However, in recent weeks, the persistently high inflation has seen the ECB take a more hawkish turn with the bank confirming at least a 25bsp hike for July and possibility of a 50bsp hike in September. Despite the hawkish policy shift, the concerns over fragmentation in bond spreads like the BTP\Bund spread as well as fears of growing stagflation risks has seen the EUR struggled to hold onto any real hawkish ECB momentum. The ECB did try to comfort spread concerns last week with an ad-hoc meeting and decided to use PEPP reinvestments as a way to calm fragmentation. But this wasn’t enough to calm concerns as reinvestment would amount to about €20 billion per month. However, the bank’s decision was enough to push the BTP\Bund down 50bsp, and if that trend can continue lower it should be supportive for the EUR. The bank did back up their attempts at calming fragmentation fears after their ad-hoc meeting by saying they are looking at introducing an additional ‘tool’ as quick as possible, so markets will be focused on any insights into what that tool might be. Even though growth data has been surprisingly resilient in the past few months, the recession fears ramped up this past week when EU Flash PMIs showed a material deceleration in growth. Incoming growth data will be watched carefully after this and any further signs that the deterioration in growth is gaining momentum should weigh on the EUR. POSSIBLE BULLISH SURPRISES Geopolitics remains a focus for the EUR, where any possible de-escalation or cease fire in the Ukraine war would open up a lot of appreciation for the EUR. Stagflation fears are high right now for the Eurozone, with growth expected to slow while inflation stays persistently high. Recent PMI data has invigorated recession fears, which means any materially better-than-expected growth data could spark some upside for the single currency. Inflation remains a key focus, which means the incoming Flash PMI prints on Friday will be important for interest rate expectations. A big upside surprise should be positive for the EUR, but there are risks that further upside in inflation which leads to higher rates also leads to further fragmentation risks. POSSIBLE BEARISH SURPRISES Spread fragmentation remains in focus, and if ECB speak in the week ahead fails to calm fears or walks back on recent hawkish comments it could trigger bearish reactions in the EUR. Flash PMIs confirmed growth risks in the EU is very much alive, we expect growth concerns to continue weighing on the EUR and means German & French retail sales will be in focus for the week ahead. Even though we expect EUR upside on big upside surprises for Friday’s flash CPI data, the secondary reaction might be negative. A CPI surprise that sparks further stagflation or spread fragmentation fears could see an initial upside reaction followed by immediate downside afterwards (which means be careful with this one) BIGGER PICTURE The fundamental outlook for the EUR remains neutral with positive and negative forces in play. On the negative side we have geopolitics, stagflation and spread fragmentation acting as negative drivers. But we also have hawkish ECB policy as a supportive driver. That means our preferred way of trading the EUR right now is taking short-term plays which are driven by clear shortterm bearish or bullish catalysts. The disappointing PMI data does open up a potential narrative change for EURGBP and we are currently positioned for some potential downside in the pair. GBP FUNDAMENTAL OUTLOOK: WEAK BEARISH BASELINE The overall bleak economic outlook for the UK, with exceptionally high Inflation and rapidly falling growth have been the biggest negative driver for Sterling. With rising price pressures and falling demand, the risks of stagflation has risen substantially, so much so that the BoE have forecasted a possible recession for the UK economy heading into 2023. At their June meeting the bank followed through with their more moderate approach by hiking 25bsp instead of growing calls of a potential 50bsp hike. The BoE is stuck between a rock and a hard place, right now they have to hike rates to try and fight inflation but by doing so they risk further damaging economic growth as a result. Even though the June statement was dovish, it wasn’t materially more dovish compared to their previous meeting. The price action was a clear warning sign that a lot of negatives has been priced in for Sterling in recent weeks so chasing lower is very risky right now. It also means we would favour upside opportunities on solid bullish short-term catalysts. POSSIBLE BULLISH SURPRISES Stagflation fears are very high for the UK, with probabilities of recession growing by the week. With so much bad news priced in, incoming news risk is asymmetrical, meaning positive surprises in growth data could trigger bullish reactions. Furthermore, as the UK is facing one of its biggest cost of living squeezes in history, lower-than-expected inflation could counterintuitively be a positive driver for the currency (lower CPI means less stagflation risk). The economy needs help right now, which means any help from the fiscal side will be a positive. Any major fiscal support measures to help consumers (subsidies for energy or tax cuts) could trigger bullish reactions for the Pound. We have BoE’s Bailey and Cunliffe up next week, any overly hawkish comments signalling more aggressive policy than what markets are currently pricing in (see our Rate Tracker for STIR expectations) could trigger bullish GBP reactions. POSSIBLE BEARISH SURPRISES Monetary policy is a double-edged sword for the GBP. Odds that the BoE has limited hikes left has been a negative driver, but so too is risks that inflation forces them to hike even more and further damage GDP. Further stagflation risks from higher gas prices or CPI prints could trigger bearish reactions. Politics is also in focus, where any attempts to oust PM Johnson by changing no-confidence laws could trigger bearish reactions. GBP is usually sensitive to political uncertainty and anything that raises odds of a snap election should be negative. With UK threats of triggering Article 16 and EU threats to terminate the Brexit deal if they do Brexit is in focus again. For now, markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside. We have BoE’s Bailey and Cunliffe up next week, any overly dovish comments signalling less aggressive policy than what markets are currently pricing in (see our Rate Tracker for STIR expectations) could trigger bearish GBP reactions. BIGGER PICTURE The fundamental outlook for the GBP remains fairly bleak right now with the economic prospects and risk of stagflation keeping the currency pressured. Anything that exacerbates stagflation fears is expected to weigh on the Pound and anything that alleviates some of that pressure should be positive. Tactically the GBP has been stretched to the downside, so any new shorts do need to be weary of the risk of some mean reversion as we saw after this past week’s BoE meeting.
by thunderpips
Part 2 of BTC "Possible" sells. Sells Here I have provided a short/long term sells positions on BTC. We are still in the bearish market and unless it brakes all previous zones I lined out on my previous post you should look at. I personally wouldn't want to buy here until I see some good support for it to go higher. Buys For a buying purpose on BTC we would need to really see it push towards 28k with a drop down to 24k with good Zones. If price gets to 28k and forms a support on 24k we would then see Higher Lows in the coming months.
BITSTAMP:BTCUSDShort
by theforexunknowntrader
EUR GBP - FUNDAMENTAL DRIVERSEUR FUNDAMENTAL BIAS: NEUTRAL 1. Monetary Policy The ECB used the April meeting as a place holder meeting for the most part by not announcing any additional policy tweaks. The plans to phase out the APP into Q3 remained intact by reducing purchases from 40bln to 30bln in May and then down to 20bln in June. Markets were leaning towards a slightly more hawkish take from the bank (given recent inflation pressures), but the lack of conviction to remove the conditionality regarding the APP removal was seen as dovish. President Lagarde added to this dovish tone by explaining that Q3 has three months and IF the bank stops the APP, it could happen July, August or September. This was an important statement as the difference between a July and September end could mean the difference between a Q3 or Q4 rate hike. The president also added to the dovish tone by stressing that risks for the economic outlook are tilted to the downside and have recently intensified with geopolitical and virus-related challenges. When asked about policy normalization, the president made a strange comment by saying it is premature to think about monpol normalisation. As the bank is currently embarking on normalization this comment seemed out of place and reaffirmed the overall dovish take from the meeting. There were the usual sources releases after the presser which said policymakers see a July hike as still possible after Thursday's meeting, which provided some reprieve. With inflation >7% and growth slowing, the June meeting which accompanies staff economic projections will be critical for markets to solidify whether expectations of 1 or 2 hikes this year is correct or not. 2. Economic – Health – Geopolitics Growth differentials still favour the US over EU capital flows, but differentials have turned positive and remain positive against the UK. Given growing stagflation fears the ECB is in a tough spot, being forced to normalize policy to try and combat inflation but could as a result further damage growth. Ongoing EU fiscal discussions to possibly allow ‘green bonds’ NOT to count against budget deficits remains in focus, alongside debt issuance for energy purchases. If approved, it will offer a flood of fiscal support which would be positive for the EUR and EU equities. Geopolitics remain a focus point as well given the ongoing war in Ukraine, but after the initial geopolitical scares but have been trying to carve out a base. Proximity to the war and the impact of sanctions remains a risk if the situation deteriorates. With lots of negatives already priced, chasing lows on bad news is not as attractive as chasing the EUR higher on good news. 3. CFTC Analysis Another very bullish signal with all three major categories seeing another week of net-long weekly changes. It seems as if all three categories added longs at the worst possible time last week as the EUR failed to garner much upside momentum. With recent growth & inflation differentials turning in favour of the EUR we prefer trading the EUR higher on good news as opposed to chasing it lower on bad news right now. GBP FUNDAMENTAL BIAS: WEAK BEARISH 1. Monetary Policy At their May meeting, the BoE delivered on expectations by raising the bank rate by 25bsp to 1.0%. There was an initial hawkish surprise as the vote split was 9-0 (no dissent from Cunliffe) and 3 of the 9 MPC members voted for a 50bsp move at the meeting. However, the hawkish reaction soon faded as it was also revealed that 2 of the 6 members who voted for a hike thought that this marked the end of the current hiking cycle. The dovishness didn’t stop there though as the BoE revised up their forecasts for peak inflation to >10% which added to the stagflation fears as the bank also saw possible GDP contraction in 2023. Furthermore, the bank took their first real stab at overly aggressive STIR pricing for the 2022 rate path by saying the current path would imply a big undershoot of their 2% inflation target in 2023 and was later backed up by Governor Bailey who said even though he thought rates should continue to rise he didn’t agree with those who think the MPC should be raising interest rates by a lot more. As the bank rate was raised to 1.0%, the markets expected some clarity from the bank on their plans to reduce the balance sheet . However, the bank decided to play for more time and said the bank will provide an update on their plans at the August meeting, pushing back expectations of active QT from Q2 to Q3. As a result of the overall dovish tone, Sterling fell to its lowest levels since 1Q21. The meeting confirmed market calls that the bank would look to hold rates steady after reaching 1.50%. 2. Economic – Health – Geopolitics With inflation the main reason for the BoE’s recent rate hikes, there is a concern that the UK economy faces considerable stagflation risk, as price pressuresstay sticky while growth decelerates. Looking at growth forecasts, the pace of the expected slowdown in the UK compared to other major economies portrays a pretty bleak picture. That means current rate expectations continues to look too aggressive, even after the BoE’s recent dovish tilt. This means downside risks for GBP if growth data push lower and/or the BoE continue to push their recent dovish tone. Political uncertainty is usually also a GBP negative, so the PM’s future remains a risk. If distrust grows the question remains whether a no-confidence vote can happen (if so, short-term downside is likely), and whether he can survive the vote (a win should be GBP positive and a loss GBP negative). Reports over the weekend suggest that a no-confidence vote can happen as early as the upcoming week so that will be a focus point for GBP. The Northern Ireland protocol remains a focus, with previous UK threats to trigger Article 16 and EU threats to terminate the Brexit deal if they do. Markets have rightly ignored this as posturing, but any actual escalation can see sharp GBP downside 3. CFTC Analysis A fairly bullish signal for GBP as all three participant categories saw net-long weekly changes. Aggregate positioning is still below 1 standard dev from the 15-year mean. Even though the outlook for Sterling shifted to weak bearish from neutral, positioning looks stretched and means we are not too excited to chase the Pound lower from here.
by thunderpips
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