European Roundtable: Global Risks for Euro and British Pound

Talking Points

• The Euro has had a strong run up against the Dollar but that could be about to change
• The oil price is looking toppish
• European stock markets remain constructive and could soon reach new highs

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From both a technical and a fundamental viewpoint, EUR/USD is looking toppish in the near-term, with upcoming elections in the UK, France and Germany, as well as the debt problem in Greece, providing plenty of potholes in the road for the single currency. The British Pound is looking fragile too, but GBPUSD still maintains a semi-bullish technical structure for now.

Meanwhile, the price of crude oil could come under pressure from the continuing global glut, despite the efforts of the major exporting countries to curb production. This week's OPEC meeting will be in focus. WTI also holds an overall bearish tilt when looking at the chart, with resistance and a potential lower-high to develop at resistance near $52.

However, global stock markets continue to go from strength to strength, with a buoyant Wall Street pushing the main European indexes in the UK, France and Germany towards new all-time highs. While markets are holding up, there is a bit of indecision here and trading could be choppy over the near-term.

Heads up: The release of tomorrow's FOMC minutes could be a source of volatility traders will want to be prepared for.

To listen to the full conversation, please see the video above.

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--- Written by Martin Essex, Nick Cawley, and Paul Robinson