Euro sterling (EUR-GBP) exchange rate predicted to fall further
- Written by: Gary Howes
-
The tables have swung in favour of sterling (GBP) as we approach the end of a month that has been resolutely pro-EUR.
The euro sterling exchange rate is predicted to fall further still after a powerful comeback by the British pound shapes up after what has been a poor month for the UK unit.
So where is the rate headed next? According to analyst Karen Jones at Commerzbank the most likely trajectory from here is lower (But beware a correction in the opposite direction):
"EUR/GBP sold off following its third failure at its 38.2% retracement at .8392. Directly overhead lies the .8419 200 day ma and we note the TD perfected set up on the daily chart and the divergence of the daily RSI – all of these factors suggest that the market has topped for now and is likely to remain under pressure.
"Current Position: Short .8373. Recommended trade: Lower stop from .8425 to .8400. Exit .8280."
Meanwhile, the GBPUSD trades above 50-dma (1.6572), the bearish momentum loses pace.
On Friday morning Jones does however caution that the euro pound exchange rate could undergo a correction after the recent strong run, so investors should be aware of this possibility.
Note: all quotes are reflective of the inter-bank market. Your bank or payment institution is free to levy a rate at their discretion. However, FCA-registered independent providers guarantee to undercut your bank's offer, thus delivering up to 5% more FX.Please learn more here.
Markets: NZD rally in focus
Turning away from euro sterling, it is the NZ dollar that has caught much attention during the Thursday session after New Zealand released a significantly higher trade surplus.
The annual trade surplus increased from NZD 312M to NZD 649M (vs. 500M expected), while February trade balance hiked from NZD 306M to NZD 818M on greater exports.
Ipek Ozkardeskaya, Market Analyst at Swissquote Bank notes:
"NZDUSD rallied to 0.8674, approaching the year high target of 0.8676. The bullish trend momentum gained pace.
"Decent option bids abound at 0.8700 for tomorrow’s expiry. AUDNZD fell to 1.0660, while the sentiment remains skewed on the upside. Key resistance retreats to 1.0848 (100 dma / broad downtrend channel top (Feb’13-Mar’14))."
