This report is not a personal recommendation and does not take into account your personal circumstances or appetite for risk.
Cable is pulling back through the 20-day MA and looks to be eyeing 1.41 – a level below which it spent much of late Feb. We see an imminent test of 1.41 as support, with historic lows 1.385 the next target for bears if we get a break-down thereafter.
A bounce off 1.41 would be encouraging for bulls, but we’d ideally like to see a strong recovery above 1.42287 and the 50-day MA to put significant upside on the cards, especially given continued Brexit-derived fundamental headwinds.
GBP/EUR did indeed rally through last week and could now be in consolidation ahead of further gains, with a break above the 50-day MA being a bullish signal. Note both the Euro and GBP are subject to pressure from ECB QE on the one hand and Brexit on the other. Which will win out this week? A pullback may find support around 1.28, but if that fails, it’s a long way down to 1.26 in terms of pips! Watch the ECB like a hawk.
While Nov rising lows are being tested, support is currently holding at a falling trend line from Aug ’15. However, note the short term chart does show a strong down move on Monday morning, followed by some flattish price action which means this pair could be consolidating ahead of another leg down.
If that comes to pass, we’re looking at downside towards 1.08. Bulls, meanwhile, will look for the pair to clear both the 100- and 200-day MAs to keep the 3-month uptrend alive, but that’s looking tenuous ahead of potential further action by the ECB.
This research is produced by Accendo Markets Limited. Research produced and disseminated by Accendo Markets is classified as non-independent research, and is therefore a marketing communication. This investment research has not been prepared in accordance with legal requirements designed to promote its independence and it is not subject to the prohibition on dealing ahead of the dissemination of investment research. This research does not constitute a personal recommendation or offer to enter into a transaction or an investment, and is produced and distributed for information purposes only.
Accendo Markets considers opinions and information contained within the research to be valid when published, and gives no warranty as to the investments referred to in this material. The income from the investments referred to may go down as well as up, and investors may realise losses on investments. The past performance of a particular investment is not necessarily a guide to its future performance. Prepared by Michael van Dulken, Head of Research
Comments are closed.