EURGBP Still to play

5 November 2015, 18:39
Khurram Mustafa
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EUR/GBP is currently trading at 0.7135 with a high of 0.7149 and a low of 0.7041.

EUR/GBP has been consolidating the upside rally post the BoE announcements, but is reluctant to let go of space at the mid point of the 0.71 handle. There has been a further bid on the profit taking down at 0.7120 and price is stablising here with a bullish bias. The BoE might be expected to hike rates in May 2016 and the dovish report is weighing on Sterling and associated crosses.

EUR/GBP wide levels

Technically, 0.7234 and the 200 DMa keeps a lid on the cross overhead and the downside remains in play below here but analysts at TD Securities said that they think EURGBP may have seen a near-term bottom at 0.7042 and they are targeting a more protracted correction. However, Karen Jones, chief analyst at Commerzbank explained that on the wide, major resistance continues to be seen at 0.7518/42 (this is the location of the previous 43 year uptrend, which should now act as resistance and the 2013-2015 downtrend). "We will maintain our bearish view while capped here". 
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