EUR/USD Coils in 100-pip Range; GBP-crosses Breakout Before BoE
- 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.
Traders are waiting on news out of the Eurogroup's meeting on Greece before choosing a direction in EURUSD. The 100-pip range that's formed this week isn't just a function of Greece, however: overstretched short positioning alongside what has been generally improving economic data out of the Euro-Zone have put the breaks on downside momentum. With the retail crowd still net-short EURUSD, a break higher around headlines around Greece may contain within it the conditions for a modest covering rally.
The British Pound hasn't been as patient as its European counterpart, with traders pushing the world's oldest currency higher a day before the Bank of England publishes its vaunted Quarterly Inflation Report. Even as incoming inflation readings have fallen well-below the BoE's mandated target level, policy officials have continued to express their desire to raise rates at some point this year. Expecting positivity from the report, the GBP-crosses have started to break higher, in particular in the commodity currency bloc.
--- Written by Christopher Vecchio, Currency Strategist
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