EUR/GBP - page 14
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Pound to Euro Exchange Rate Rate Forecast: 1.17 Next
The British Pound retains an upward bias on Thursday 19 January as the impetus provided by Theresa May's convincing speech on her Governments position on Brexit remains alive.
As a result, tthe GBP to EUR exchange rate has staged an impressive reversal over the course of the past week, we have seen the conversion rise from a low of 1.1286 to a best of 1.1595.
The question we are mostly asked is whether the reversal constitutes the start of a new uptrend for Sterling - can the gains extend into a more substantial rally from here?
The truth is, it’s still a little too early to say.
From a technical point of view the only sign this could be the start of a stronger bullish trend is Tuesday’s massive up-day:
These sorts of long bullish days often mark the beginning of a young bull trend.
Or put another way – rare are those bullish reversals which do not start with a strong surge.
1.1700 Next Possible Target, 1.21 Possible Longer-Term
The four-hour chart above is useful for indicating the start of new short-term trends.
On GBP/EUR’s four-hour chart, however, the move up is still not evolved enough yet to denote a new uptrend.
It is still only composed of three waves which means it could just as likely be an a-b-c correction of the downtrend as a newborn uptrend.
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Sustainability of Pound to Euro Rate’s Strength Draws Scepticism from Analysts
The British Pound's ride higher is a flight of fancy argue a number of institutional analysts.
The Pound jumped higher against a host of currencies following PM May's keynote speech on the Government’s position on Brexit.
But, big-name foreign exchange researchers remain largely unconvinced by the British Pound’s ability to sustain recent gains.
“The Brexit debate has entered a new round. The Supreme Court verdict is expected on Tuesday. But even if the court were to decide that parliament has to approve Brexit, only the timing of Brexit will be delayed (if at all). After May's speech, all indications are that negotiations with the EU will turn out to be difficult,” says Markus Koch at Commerzbank.
The speech has been widely welcomed by European leaders, and importantly the UK public.
55% of the public approved of May’s stance according to a recent poll on the matter.
However, even here there is concern over whether the desires can be delivered with a majority believing May’s deal is not necessarily the sort of arrangement that other EU countries will agree to, or the sort that May will end up bringing back from Brussels.
By 47% to 38% the public do say they have confidence in Theresa May to negotiate the sort of deal she described, but they do not expect the other member states of the EU to agree to them.
Only 20% of people think that the EU will agree to the Brexit deal she wants, 56% think they will not.
“Consequently, we are sceptical regarding the latest steep rise in the Pound,” says Koch.
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Interesting week ahead for Sterling Euro exchange rates
The Pound has made some gains vs the Euro during the course of the week with Prime Minister Theresa May announcing her Brexit strategy on Tuesday.
She stated that the UK would look to leave the single market if we are unable to control our borders and also if we are to fully leave the European Union we would be unable to stay in the single market.
However, at the same time May went on to say that the UK would be looking for new trade deals across Europe and the globe and that we would be looking for the best possible outcome for the UK.
May also stressed that she would be looking to keep rights for Britons currently living abroad and maintain a reciprocal deal with Europeans living in the UK.
The positive tone of the speech helped to push the Pound up against the Euro after falling over last weekend.
With the Supreme Court judgement due on Tuesday its importance has fallen as it appears as though Theresa May got in there first and said that the UK would seek parliamentary approval.
I still think the judgement will be extremely important and this is likely to cause a lot of volatility for GBPEUR rates once the news has broken so it is important to watch out for the release.
In the meantime we have also now seen the inauguration of Donald Trump into the White House and it will be interesting to see how the financial markets will react now that he is President.
In his speech yesterday he spoke about giving power back to the people which all sounds very positive but it will be difficult to see this working in practice.
Clearly there has been an obvious shift in power and I think once the US financial markets are open again on Monday morning we could see further volatility on the global foreign exchange markets.
source
I have closed my short and I am waiting for the pair to pick a direction.
Greetings,
EUR/GBP is just testing support at 0.8600. Looks the movement may continue down to 0.8540/50 shortly after the breakout.
Euro To Pound Outlook - Will Supreme Court Decision See EUR/GBP Exchange Rate Tumble?
At the time of updating, the Euro Pound exchange rate trended in the region of 0.8611.
The euro was down around 0.4% on the day as UK Supreme Court bets kept GBP investors excited.
Tuesday will be an important session for EUR/GBP, as the Supreme Court’s decision will come out as well as Markit’s preliminary January PMIs for the Eurozone.
Sterling is likely to push EUR/GBP down if the Supreme Court decides to uphold the High Court’s previous ruling.
EUR GBP Exchange Rate Softened as Brexit Uncertainty Diminished
Brexit-based jitters have seen the Euro Pound (EUR GBP) exchange rate fall away from its recent two-month highs, weighed down by the increased sense of clarity over the UK government’s negotiation strategy.
The appeal of the single currency was also dented by the more dovish tone taken by the European Central Bank (ECB), which suggested that policymakers remained less-than-inclined to consider tapering the quantitative easing program.
However, both the Pound and Euro have benefitted from the renewed weakness of the US Dollar (USD) at the start of the week, with worries over Donald Trump eclipsing the uncertainty of Brexit for the time being.
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GBP: Still Heading For A 'Hard Brexit': Timetable & EUR/GBP Targets
As expected, the Supreme Court ruled that the parliament and not the government has the power to invoke Article 50, which formally starts the exit negotiations with the EU. Thus the Supreme Court upheld the High Court’s decision in November. Market reaction was limited.
Based on stories in UK media, most cabinet ministers expected to lose the appeal case. In PM Theresa May’s Brexit speech, it also seemed that she had already accepted that the parliament needs to be involved in the negotiation process, as she mentioned the final deal will be put to a vote in both Houses of Parliament.
However, it was a victory for the government that it does not need to consult the assemblies in Northern Ireland, Scotland and Wales before triggering Article 50.
We do not think the Supreme Court’s ruling will delay the triggering of Article 50. Brexit Minister David Davis has said the government will introduce Article 50 legislation ‘within days’.
In other words, we will have some arm wrestling between the government and the members of parliaments in the coming two months ahead of the triggering of Article 50. However, it is worth noting that the EU is not bound by whatever strings may be attached by the UK government, so we still think we are heading towards a hard Brexit, as the UK cannot stay within the single market and get control over EU immigration at the same time.
We still expect EUR/GBP to come under pressure as the triggering of Article 50 moves closer. We target EUR/GBP at 0.88 in 3M but see risks skewed to the upside.
source
It’s very bearish again.