Yahoo Finance Euro continues noisy trading against Sterling
The EUR/GBP pair has been very noisy over the last 24 hours, going sideways in a roughly 30 pip range, as the market can’t decide which direction to go. I think that ultimately we are going to remain somewhat range bound, but with a very muddy edges. The market seems to respect the 0.88 level above, so that could be thought of as a bit of a ceiling, but quite frankly I don’t think it’s going to be considered a major level. Underneath, we have the 0.87 level, which has yet to be significantly tested but I suspect it won’t hold very long either, perhaps opening the door to the 0.86 handle underneath. That could be the longer-term target, as I believe that the situation in Europe is starting to deteriorate.
There are serious concerns about Italian banking and Italian bonds now, stop me if you’ve heard this story before. In other words, it’s more of the same, fixing major wounds with Band-Aids in Europe is starting to come back to haunt the market. While we do have the concerns of the United Kingdom and the so-called “Brexit”, the one advantage that the UK has is that they are going to be stuck with the European Union very long. I think that the Bank of England raising interest rates sometime in the next 12 months will help as well, as the ECB has recently suggested that they may buy corporate bonds for what could be essentially forever.
EUR/GBP Video 23.05.18
This article was originally posted on FX Empire
