Lloyds and Nordea Forecast Pound / Euro Above 1.35 by Start of 2017
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A long bullish candle formed on GBP/EUR at the close of the week 13-17 June, and this may be the first sign of a broader recovery envisaged by analysts at Lloyds and Nordea Bank.
The longer-than-average bullish day's range which formed on Thursday the 16th, followed by a strong close on Friday the 17th June, could be a first sign that the tide may be changing for the pound.
Sterling has taken a hammering over recent weeks as the lead for the 'Remain' campaign has shrunken to a hair's breadth.
Days which have long ranges and close towards their highs are especially strong technical signals of more upside to come, although their forecast horizon is not long-term. Nevertheless, they can mark the beginnings of medium term trends.
This bullish outlook falls in line with research from Lloyds Commercial Banking and Nordea, which has pointed to the probability of further upside in the exchange rate over the next 3-6-month horizon.
Another technical sign there could be more upside comes from viewing the move down from the 1.44 highs in July last year as a type of pattern called an Elliot Wave.
Without wanting to get too technical, such an analysis would suggest the move up from the 1.23 April lows had not completed - at least in time.
It will only have completed after the MACD - on a special 4,31 setting used to analyse Elliot Waves - has moved above the zero line - which is has not yet done.
This analysis would suggest the possibility of the next move being up, to retouch the 1.32 May highs.
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