Back
11 Jun 2014
EUR/GBP and the chance of further downside – Danske Bank
FXStreet (Edinburgh) - Morten Helt, Senior Analyst at Danske Bank, believes more pullbacks are on the cards for the EUR/GBP.
Key Quotes
“GBP gained yesterday on the back of stronger-than-expected UK industrial production data”.
“However, EUR/GBP failed to break below the strong technical support level at 0.8064 and most of the decline in EUR/GBP was reversed during yesterday’s trade session”.
“However, we look for yet another strong UK labour market report today, which is likely to support the GBP. The release for March surprised significantly on the upside with the 3m employment growth being the strongest since the start of the statistics in 1972”.
“We expect the headline unemployment rate to decline further from the current level of 6.8% to 6.7%, which could fuel market’s questioning of Bank of England’s statement about the amount of slack in the UK economy and consequently renew focus on how long Bank of England can avoid discussing an interest rate hike”.
“All in all, a new test of the technical support level at 0.8064 in our view seems likely today and if EUR/GBP manages to break below this level, it will also form a new 2014 low for the cross”
Key Quotes
“GBP gained yesterday on the back of stronger-than-expected UK industrial production data”.
“However, EUR/GBP failed to break below the strong technical support level at 0.8064 and most of the decline in EUR/GBP was reversed during yesterday’s trade session”.
“However, we look for yet another strong UK labour market report today, which is likely to support the GBP. The release for March surprised significantly on the upside with the 3m employment growth being the strongest since the start of the statistics in 1972”.
“We expect the headline unemployment rate to decline further from the current level of 6.8% to 6.7%, which could fuel market’s questioning of Bank of England’s statement about the amount of slack in the UK economy and consequently renew focus on how long Bank of England can avoid discussing an interest rate hike”.
“All in all, a new test of the technical support level at 0.8064 in our view seems likely today and if EUR/GBP manages to break below this level, it will also form a new 2014 low for the cross”