Over 40 years’ heritage
185,800 clients worldwide
Over 15,000 markets

Day 5: our EUR/GBP trade

Our ‘one to watch’ this week hasn’t been filled and the technicals suggest indecision is being seen from the trading community.

It seems good buying support is occurring below 0.8400, although EUR/GBP can’t find any real upside traction. Weak eurozone industrial production (down 1.5%) curtailed the rally and could have negative ramifications on future PMI manufacturing reads. We also heard relatively upbeat comments from BoE officials and they largely didn’t push back on the rise in rate hike expectations as much as we had expected, thus the pound didn’t fall as much as we had hoped.

We stay on the sidelines for now and continue to like selling rallies in this pair given the short-term oversold nature of the pair.

On a side note, our ‘one to watch’ from last week hit our proposed target of $1345 and thus we revert to the sidelines, although momentum favours further downside. We feel gold has the potential to fall to the 61.8% retracement of the $1337 to $1433 rally at $1307 in the medium term. Gold chart below.

euggbpchartotw

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.