EURGBP Price Outlook - Short-Term Trading Range Forming
EUR/GBP News, Price and Analysis:
- Brexit talks and coronavirus news will dictate price action.
- EUR/GBP remains constrained within a short-term range.
EUR/GBP Likely to Stay in a Two-Point Range
Trade talks between the EU and the UK resumed this week with both sideslikely to offer little hope of breaking the current stalemate. Prime Minister Boris Johnson remains firm that the UK will not request and extension to the December 31 leave date, while the EU will continue to demand that the UK remains within the existing EU framework. This high level game of bluff is being played out against a background of coronavirus-ravaged economies with both sides expected to show negative growth in Q2 and beyond.
Thursday sees the release of the preliminary April PMI data which will give the market a new snapshot of where economies are likely headed. Last month’s numbers made multi-year and multi-decade lows and current forecasts show that tomorrow’s data may well be worse.
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EUR/GBP has rallied off the 0.8700 level this week and Tuesday touched a prior short-term high at 0.8865 before retreating. This level, if broken would open the way to the 50% Fibonacci retracement level at 0.8891 and three prior highs all the way to just under 0.9000. In the current climate this move will require a strong fundamental driver. The short-term downside is currently marked at 0.8678 and strengthened by the 200-day moving average at 0.8667. Again a breakout seems unlikely and in the short-term the three-week 0.8678-0.8865 range may well remain intact
EUR/GBP Daily Price Chart (November 2019 - April 22, 2020)
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