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Forex: EUR/GBP look to break out of range to upside

FXstreet.com (Barcelona) - Having traded in a tight range since the end of last week, EUR/GBP looks to be breaking out to the upside after a morning of mixed European data.

The pair has roughly moved between 0.8525-0.8545 since Friday evening, but has just broken out to the upside and is currently trading at 0.8556. Early support was found around the daily pivot point this morning at 0.8531 and is now approaching R2 at 0.8569 where it may meet near term resistance. Hourly MA´s are indicating upside bias, but on a daily chart momentum looks more neutral. Today´s economic data has been mixed, with UK CPI beating expectations YoY but dipping MoM. UK PPI slumped, alongside RPI. EU CPI beat expectations, but the German ZEW Survey came in disappointingly, perhaps adding to eventual expectations of an ECB rate cut at the next meet. Hourly Stochastics are at 69 and look to have formed a plateau just below overbought territory. Hourly RSI is at 66 and is moving with an upside bias.

European markets fall, US futures set for a rebound

The German DAX 30 (-0.51%), the French CAC 40 (-0.60%), the Italian FTSE MIB (-0.31%) and the Spanish IBEX 35 (-0.43%) are down, like the rest of European equity indexes, on disappointing economic sentiment in the Eurozone and Germany. The ZEW survey showed a decline in EMU economic sentiment, from 33.4 to 23.9 in April. In Germany, economic sentiment disappointed the market, falling from 48.5 to 36.3, below the expected 42.0. Current situation wasn’t good either, dropping from 13.6 to 9.2, below 12.0 consensus.
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Forex: EUR/USD shoots above 1.3100

The EUR/USD embraced the upside and moved above the 1.3100 handle, reaching as high as 1.3114 for now, as European investors go for lunch and the market prices in expectations ahead of the US data, including the CPI report, Housing Starts and Industrial Production. “We expect headline CPI to rise by +0.1%/mth, following the chunky +0.7% rise the month before. On an annual basis, favorable base effects lower the rate from 2.0% to 1.7%/yr (mkt 1.6%)”, wrote TD Securities analyst Annette Beacher, expecting also a relatively subdued Core CPI, at +0.2%/mth and 1.7%/yr (mkt 2.0%).
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