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Thomson Reuters
Apr 12 - 06:12 AM
EUR/GBP - COMMENT-EUR/GBP Should Drop Ahead Of Next Brexit Deadline
First appeared on eFXplus on Apr 12 - 03:05 AM

Now the Brexit deadline has been extended, sterling traders should look for gains versus the euro.
Uncertainty may hold equal risks for Europe and the UK while the euro zone economy seems to be faring worse than the UK economy.
Bearish EUR/GBP techs, blunted by a long period of inactivity during the Brexit uncertainty, may unfold now that new deadline is set.
EUR/GBP, which traded within 0.86-0.91 for 18 months, should have fallen further after breaking below that range in February.
The drop reached 0.8472, but that fell short of expectations.
That said, the weak rebound -- barely over the base of the old range -- leaves bearish potential intact and should encourage top picking.
The collapse in volatility that should weigh on the euro as a core funding currency may underpin GBP, which is often grouped among lower-yielding commodity currencies like NOK or AUD.
Should EUR/GBP drop below 0.8454, 38.2 percent of its major rise, a far more bearish market will evolve.

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