Sterling (GBP) Starting the Week in Positive Fashion on Brexit Rumors
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GBPUSD and EURGBP Technical Analysis
- GBPUSD heading back towards the 200-day moving average.
- EURGBP will be steered by data prints and ECB talk.
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In what is expected to be a quiet trading session with the US out as they celebrate US President’s Day, Sterling has opened higher across the board after positive Brexit newspaper commentary over the weekend. The Times reported that various EU countries, including France, were ready to offer concessions to the Irish backstop agreement to help get the deal over the line. French officials later denied this report, but Sterling seems to believe that moves are being made towards an agreement.
GBPUSD has picked up from last Thursday’s 1.2770 low and is now trading either side of 1.2900 after hitting an early peak around 1.2925. This push higher has taken GBPUSD above the 50-day moving average at 1.2874 and is homing in on the 200-day ma at 1.2944. A break and close above this level – not likely today due to the US holiday – would open the way to the 20-day ma at 1.2990 and then to 1.3000 and above. Price action is expected around the 23.6% Fibonacci retracement level at 1.2894.
GBPUSD Daily Price Chart (May 2018 - February 18, 2019)
An interesting week ahead for the Euro with a raft of data releases, severel speeches by various ECB board members, and the publication of the January ECB governing council meeting minutes. All of this week’s data and news has the ability to shift the single currency. The Euro is currently weak as expectations of any tightening on monetary policy this year disappears, while talk of new liquidity measures, via a third round of TLTROs, continues to do the rounds.
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The daily EURGBP chart continues to suggest lower prices with upside progress blocked by 61.8% retracement at 0.8803, the 50-day ma around 0.8850 and the 200-day day ma at 0.8881. The pair currently trade on the 20-dat day moving average and ma look at old swing-low support at 0.8723 before the November 13 low at 0.8656 and the recent multi-month low around 0.8620 comes into focus.
EURGBP Daily Price Chart (May 2018 - February 18, 2019)
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