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3 Mar 2014
EUR/GBP tipped for the upside on firm ECB
FXStreet (Guatemala) - EUR/GBP has been tipped to keep rates on hold this week and the pair is starting to create a sideways channel post Fridays rally, giving back some of the gains when the pair reached a high of 0.8270.
EUR/GBP is trading between a band of 0.8251 and 0.8223 while that range is starting to narrow between 0.8230/40. There were slight improvements for both the UK and EZ Markit Manufacturing PMI’s.
In respect of the Central Banks this week, RBS analysts explained that this week's March BoE MPC meeting may be dull . However, while financial markets will undoubtedly be preoccupied with the Ukraine, they said Thursday's ECB meeting and Friday's payroll report provide the main macro economic event risks for developed currencies this week. “Last week's stronger than expected Euro area CPI tips the balance in favour of an unchanged decision on interest rates from the ECB. We do not totally rule out the possibility of a liquidity injection (for example, the non-sterilization of the Securities Market Program (SMP) purchases) and this is where most of the event risk for the EUR lies…Given the increasing probability that the ECB keeps policy on hold on Thursday, we expect EUR/GBP to trade a little more strongly this week”.
EUR/GBP Levels
The 20 DMA is O.8251, the 50 DMA is 0.8273 and the 200 DMA is 0.8436. RSI (14) reads 48.57. Supports are ascending from 0.8157, 0.8191, 0.8209, 0.8220. Spot is 0.8236. Resistances are 0.8268, 0.8290, 0.8301 and 0.8337.
EUR/GBP is trading between a band of 0.8251 and 0.8223 while that range is starting to narrow between 0.8230/40. There were slight improvements for both the UK and EZ Markit Manufacturing PMI’s.
In respect of the Central Banks this week, RBS analysts explained that this week's March BoE MPC meeting may be dull . However, while financial markets will undoubtedly be preoccupied with the Ukraine, they said Thursday's ECB meeting and Friday's payroll report provide the main macro economic event risks for developed currencies this week. “Last week's stronger than expected Euro area CPI tips the balance in favour of an unchanged decision on interest rates from the ECB. We do not totally rule out the possibility of a liquidity injection (for example, the non-sterilization of the Securities Market Program (SMP) purchases) and this is where most of the event risk for the EUR lies…Given the increasing probability that the ECB keeps policy on hold on Thursday, we expect EUR/GBP to trade a little more strongly this week”.
EUR/GBP Levels
The 20 DMA is O.8251, the 50 DMA is 0.8273 and the 200 DMA is 0.8436. RSI (14) reads 48.57. Supports are ascending from 0.8157, 0.8191, 0.8209, 0.8220. Spot is 0.8236. Resistances are 0.8268, 0.8290, 0.8301 and 0.8337.