EUR-, GBP-crosses Near Critical Junctures in Emotional Environment
- EURUSD holding bottom of recent range - no break yet,
- EURGBP closing in on 2015 lows.
- See the February Forex Seasonality report and the implications for the majors.
Key technical levels are being tested, although the headline-driven nature of the market means random bursts of volatility re likely to be an important factor. In EURUSD, the $1.1260 level is coming back into focus the day ahead of the Eurogroup meeting on Greece. Not dissimilar from the pre-ECB leaks at the end of January, price over the next 24-hours is probably very susceptible to rumors and headlines, meaning any technical breakdown is suspect at best.
Then headlines around the British Pound are likely to be of a calmer nature, although the BoE's Quarterly Inflation Report on Thursday will likely be a bombshell. Irrespective of counterpart, several GBP-crosses are in consolidation phases that are poised for resolution by the end of the week. Active risk management is very important over the next few days.
--- Written by Christopher Vecchio, Currency Strategist
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