Daily Forex Technicals |
Written by Forex.com |
May 08 13 09:59 GMT
EURGBP: 0.8475 Resistance On The Doorstep
The stability in the euro has been impressive and it has been moving higher with global stock markets. It seems the global wall of central bank liquidity has helped to prop up the single currency even against the best efforts of the ECB, who have gone to extremes to try and limit EUR strength in recent months.
But has EURGBP gone too far? It is at a critical juncture and is testing key resistance at 0.8475 – the 100-day sma. EURGBP could go either way from here. From a fundamental perspective this cross looks ripe to be sold, especially as we lead up to the BOE meeting on Thursday when the Bank is expected to remain on hold. This contrasts with the ECB’s threat of negative deposit rates. However, from a technical perspective, if we get above 0.8475 this is a bullish development for this cross that opens the way to 0.8510.
Levels to watch:
- 0.8475 – 100-day SMA and key resistance level.
- Hearing rumours of sell orders building around 0.8500-10, which may thwart the bulls.
- Support: recent lows at 0.8400.
In the short term a break above 0.8475 is a bullish development for this cross, but gains could be limited to 0.8500-10 ahead of tomorrow’s BOE meeting.
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