We use a range of cookies to give you the best possible browsing experience. By continuing to use this website, you agree to our use of cookies.
You can learn more about our cookie policy here, or by following the link at the bottom of any page on our site.

Free Trading Guides
of clients are net long.
of clients are net short.
Long Short

Note: Low and High figures are for the trading day.

Data provided by
Oil - US Crude
More View more
Real Time News
  • Just a reminder, the White House's deadline on the auto tariff decision is due today after the extension. Stay on Twitter watch. Trump seems to like make big calls shortly after the close...
  • Heads Up:🇳🇿 NZD BusinessNZ Manufacturing PMI (OCT) due at 21:30 GMT (15min), Actual: N/A Expected: N/A Previous: 48.4 https://www.dailyfx.com/economic-calendar#2019-11-14
  • RT @ABehsudi: Commerce is expected to extend a limited, temporary waiver for blacklisted firm Huawei, notwithstanding any last-minute direc…
  • RT @zerohedge: POMO is temporary, they said. It's just a mid-September tax payment, they said https://t.co/nBeHAZ9kJc
  • $MJ: Pot stock market caps going 'up in smoke' https://t.co/q3v88TVO93
  • Indices Update: As of 21:00, these are your best and worst performers based on the London trading schedule: France 40: 0.19% Germany 30: 0.11% US 500: 0.02% Wall Street: 0.01% View the performance of all markets via https://www.dailyfx.com/forex-rates#indices https://t.co/TtF93qmxed
  • Oh, team building exercises. I'm sure that brought Knot and Holzmann around to dropping concerns about diminishing returns on negative rates and extreme monetary policy... https://t.co/5lpgsAJtbC
  • Update on #Cryptocurrencies #BITCOIN -1.15% #BITCOINCASH -2.47% #ETHEREUM -1.87% #RIPPLE -1.87% #LITECOIN -2.84%
  • RT @CNBCnow: BREAKING: The 50 attorneys general investigating Google are preparing to expand their antitrust investigation beyond the compa…
  • remaining operations will include 14-day with $35b offering
EURGBP Price Analysis: Longer-Term Chart Points Lower

EURGBP Price Analysis: Longer-Term Chart Points Lower

2018-09-11 08:08:00
Nick Cawley, Analyst

Sterling (GBP) Talking Points:

  • EURGBP driven lower by positive Brexit commentary.
  • Next leg lower may happen on Thursday as the BoE and ECB opine.

The DailyFX Q3 GBP Forecast is available to download.

Sterling Looking to Keep Recent Rally Alive

After languishing in recent months, GBP received another boost Monday when EU chief negotiator suggested that a Brexit deal could happen in the next 6-8 weeks.This follows on from his recent commentary that the EU is willing to offer the UK an unprecedented third-party trade deal. The change in tone has seen EURGBP back-off from a recent high around 0.9100 to a current level around 0.8900.

A look at the weekly chart shows that this move has more to go with the pair making three lower highs/lower lows in the past three weeks, a negative technical set-up. EURGBP also nears the 20- and 50-day crossover near 0.8850, ahead of the 23.6% Fibonacci retracement at 0.8845. The April weekly low at 0.8621 remains a medium-term target.

IG Client Sentiment shows that retail investors are net-short EURGBP but have been chnagingb their positions recently.

EURGBP Weekly Price Chart (January 2016 – September 11, 2018)

EURGBP Price Analysis: Longer-Term Chart Points Lower

The daily EURGBP chart is also negative with the pair trading below the 20- and 50-day moving averages and heading towards the 200-day ma at 0.8823. A break and close below here would open the June 15 low at 0.8718 before the May 29/30 double low at just under 0.8700.

EURGBP Daily Price Chart (March 1 – September 11, 2018)

EURGBP Price Analysis: Longer-Term Chart Points Lower

BoE and ECB Central Bank Double on Thursday

Ahead, the European Central Bank (ECB) and the Bank of England (BoE) will announce their latest monetary policy settings on Thursday – no changes expected from either central bank – but the accompanying commentary and press conference may give clues to future moves. UK monetary policy is currently on-hold until the Brexit outcome is clear, although the BoE keep reiterating that future policy is data dependent. Current thinking is that the next UK rate hike will be triggered in September 2019 although if current strong UK data continues, and Brexit is agreed, the May ‘Super Thursday’ meeting may come into play.

The ECB in contrast will continue with their accommodative policy as inflation refuses to move towards target. Growth in the single-bloc is slowing down and the fear is that, despite turning the QE tap off at the end of the year, the euro-zone may need another boost.

We turned positive on GBP-crosses recently, giving our reasons here:

GBPUSD Weekly Technical Outlook: Continuing to Press Higher

GBP Fundamental Outlook: Momentum to Drive Sterling Higher

Traders may be interested in two of our trading guides – Traits of Successful Traders and Top Trading Lessons – while technical analysts are likely to be interested in our latest Elliott Wave Guide.

--- Written by Nick Cawley, Analyst

To contact Nick, email him at nicholas.cawley@ig.com

Follow Nick on Twitter @nickcawley1

DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.


News & Analysis at your fingertips.