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EUR/GBP: headed for a sell-off?

FXStreet (Guatemala) - EUR/GBP remains in a robust position above the 200 DMA, recovered from the lows of 0.6932 seen in July's business on the long-term downtrend from the 0.84 handle.

The cross has somehow managed to garner demand despite the disparity between the Central Banks and the ECB potentially embarking on further QE while sentiment is for the BoE and Fed to start increasing interest rates, with the Fed likely to begin before the year is out and the BoE sighted to commence at some stage in the first half of next year.

Risk-off flows had been supporting the single currency while equities and risky asset classes that were funded using the euro carry were unwound, but that correlation has started to moderate now according to analysts at Scotiabank.

Nevertheless, the euro continues to garner strength and visa-versa in this week's performance in stocks, evident in Glencore's recovery and a slump in the direction of the single currency in the European shift today.

The euro has gathered pace again in the US shift as has the cross, targeting 0.7436 highs while 0.7380 and the 50 SMA on the hourly offers near term support. The Nonfarm Payrolls, UK GDP and Carney are all risk factors that may instigate a pause the the cross's bid.

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