EUR/GBP Downside Playing Out on Brexit Remain Camp
EUR/GBP has seen a recent bearish trend take fold as
the clock is ticking at the start of a new month and we head ever closer
to the EU referendum and the possibility of a Brexit is actually
looking a little lower, fuelling a bid in the pound while the weakening
in U.S. dollar also underpins a recovery in Sterling.
Related read: The investor is an endangered species: Exit EU edition
"In
recent weeks UK rates have risen due to significant re-pricing lower of
Brexit premia—spurred on by a sharp move higher in betting odds of
Remain, which got as high at 75% intraday," explained analysts at Brown
Brothers Harriman, adding, "We see risks building for a correction on UK
rates, as the market prices higher Brexit risks."
EUR/GBP levels
EUR/GBP
outlook remains negative in the bearish price action on the charts.
Near-term rallies could find resistance at circa 0.7920/50 and at late
March highs where shorts could be added on rallies for a fade into the
continuation of the downside targeting 9th of March lows at 0.7651. "We
view the currency pair as having topped at .8116 and it eroding the
0.7755 January high. We look for further slippage to the 0.7654 area. It
is where the March low can be seen," explained Karen Jones, chief
analyst at Commerzbank.
