MO EURGBP – 12.10.2018
38647
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MO EURGBP – 12.10.2018

Long Term Overview:

Economic Analysis

Recent Brexit developments are looking non-favourable for both parties at time of writing, due to the probability of the Brexit deal passing through parliament looking to be of low viability. As a result, the medium – long term positioning of the EURGBP is heavily reliant on the outcome of the Brexit deal.

In recent weeks the market has seen Euro Zone bond yields reassert themselves as a major influencing factor in terms of EUR stability. With ongoing Italian budget negotiations likely to continue to destabilise the EUR in the near term.

The combination of accurate Brexit economic impact data and on-going internal EU concerns, alongside the ongoing weak but relatively stable position of the UK economy suggests there remains a lot of indecision as to how Brexit will affect the EU and the U.K., however forecast predict that the Euro will be less negatively affected than the Pound under a no deal environment. However, should a deal be reached the opposite is expected to be the case.

Long Term Analysis

The Long-Term market position of the EURGBP is heavily reliant on the outcome of Brexit. However, Bullish volume is increasing on all three up time frames displayed, with bullish momentum increasing on the three-Monthly Chart. The second previous monthly and bi-monthly also closed on a fake hammer candlestick, which may suggest further bullish bias to persist throughout the long term. EURGBP may reach to previous highs nearing the 0.9100 region within the next financial quarter.

 

Decision Point: Close below previous highs nearing the 0.8960 area

Long Term Trend: mixed

Channel Range: N/A

Possible Bias: Long

Medium Term Analysis

The Medium-Term bias for the EURGBP is mixed and is heavily reliant on Brexit related issues. Price gapped up from the previous weeks close and before recovering and filling in the gap. Price has since then broken above the previous weeks high and is increasing in bullish volume on all three up time frames displayed. Because of these factors, EURGBP may strengthen to the previous highs near the 0.8990 area, within the next couple of weeks. However, once again caution on this instrument may be advisable as markets are still very unsure of how Brexit will affect both economies.

 

Decision Point: Close above previous high nearing the 0.8905 area

Long Term Trend: Mixed

Channel Range: N/A

Possible Bias: Long