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Forex: EUR/GBP looks to confirm daily high

FXstreet.com (Barcelona) - Having steadily climbed this morning before pulling back, EUR/GBP is again creeping higher as we move towards the European close.

Having ranged overnight at support around 0.8580, EUR/GBP climbed to post a high at 0.8636 following this morning BoE minutes, before pulling back to find support around 0.8610, where today´s R1 resistance lies. The pair has since edged higher to where it is currently trading at 0.8622. Hourly Moving Averages are indicating a continuation of the uptrend. Hourly Stochastics have moved from overbought territory to 57 and have a downward momentum, while RSI is at 71, with a slight uptrend bias.

Forex Flash: Three misconceptions of short-term orientation of investors – JP Morgan

JP Morgan analysts caution against the exclusively short-term orientation that many investors show, as even themselves have had to shift focus more to the medium term, “and this keeps us solidly overweight equities against fixed income, concentrated in the US and Japan”. The argument points to three misconceptions. First, that it is often argued that to de-risk a portfolio, one should hold more bonds, as they have much lower volatility than equities: “We contend this is true over the short term, but much less so over the long term, as much of equity volatility is noise that disappears over holding periods of 3 years and more”, wrote analyst Jan Loeys, adding that “bonds are nominal assets that move with inflation which is not a stationary process. Over periods of more than 10 years, we note that US equities do not show that much more volatility than Treasuries”. Also, risk should be seen as the probability that you fail your objectives. Having said that, “pension funds that are underfunded would maximize the chance that they fail their liabilities if they invest largely in low-yielding fixed income. With equities, they would at least have a fighting chance”.
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Forex Flash: Gilts held at key 118.61 mark – RBS

The price of gilts was held at 118.61, the 123.6% Fibonacci projection from the March impulse wave. According to Technical Strategist Dmytro Bondar at RBS, “There also was an island reversal; formation on Friday, suggesting the gap and Fibonacci level of 118.97 to become a major support. We favor buying dips near 118.97/119.06, looking for a recovery to 119.56/93 onto 120.50 on a caveat of a sustained break below 118.61”.
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