EUR/GBP Outlook - Price Action Continues to Break Down
EUR/GBP Price Outlook, Analysis and Chart:
- EUR/GBP trades near low last seen 6-months ago.
- April 2017 low print remains the bearish medium-term target.
EUR/GBP Price Analysis
EUR/GBP’s slow grind lower continues, and this week the pair made a fresh multi-month low after bouncing off short-term support. The British Pound remains firm with expectations continuing to build that Boris Johnson will not only win the upcoming election on December 12 but will also gain a majority in Parliament, making it easier for him to push through his Brexit plans. The Euro on the other hand continues to drift lower against a backdrop of muted inflation and growth prospects. ECB President Christine Lagarde has already said that fiscal policy throughout the zone needs to be implemented alongside the central bank’s accommodative monetary policy and it remains to be seen how much push back this receives, especially from Germany.
The daily EUR/GBP chart shows the pair now just below recent support around the 0.8570 area with little support seen until the May 5 print at 0.84907, a low that guards the March 13 multi-month print at 0.8472. A trade here would complete the reversal of the March-August 850 pip rally. The recent sell-off has also taken the price below all three moving averages, a bearish chart set-up.
The CCI indicator at the bottom of the chart shows the market is currently oversold and this may stem any sharp fall in the short-term. There are a cluster of resistance levels all the way back up to 0.8675.
EUR/GBP Daily Price Chart (January - November 15, 2019)
IG Client Sentiment shows that traders are 64% net-long EUR/GBP, a bearish contrarian bias. However daily and weekly sentiment shifts give us a mixed outlook.
What is your view on the Euro and Sterling – bullish or bearish?? You can let us know via the form at the end of this piece or you can contact the author at email@example.com via Twitter @nickcawley1.
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