EUR/GBP: better bid on French polls, US yields/intermarket and Brexit fears
EUR/GBP is getting political and with the recent French polls evening out while Brexit concerns grip the market yet again, the euro is consolidating while sterling is falling helped along by yield gap differentials vs the dollar. However, we have the ECB this week and a dovish bias is expected which could dampen the bull's spirits this week.
GBP/USD intermarket: US 10y yields through 2.50%, GBP to drop to 1.2000?
House of Lords Brexit debate: Nonsense to suggest a second referendum is undemocratic - Lord Turner
Meanwhile, in French polls, the Republican party was coming out in support of their candidate, Francois Fillon. Yesterday evening's rolling IFOP poll saw E Macron up to 25.5%, just behind M Le Pen on 26.5, noted Kit Juckes economist at Societe Generale, "The gap to F Fillon grew as he slipped to 19%. The perception of a two-horse race doesn't remove the uncertainty but leaves EUR/USD tracking relative yields, which in practise means going nowhere much."
Latest poll on 2nd round - euro positive
Elabe Poll: Either Macron or Fillon to beat Le Pen in second round
EUR/GBP levels
"We put out a long EUR/GBP recommendation on Friday, and that seems a good way to trade a meandering market for now," Kit Juckes was recommending.
EUR/GBP near term outlook negative bias was negated when the market rallied up from the 0.84 handle at the end of last month breaking its 5-month downtrend. The price has now busted through the February and the 30th December highs. According to analysts at Commerzbank, there is now scope for a run towards the Fibo resistance and the recent high at 0.8852/53.
"We assume that 0.8852/53 is a short-term top for the market. In the very near term, we note 13 counts on the 60 and 240-minute charts and will attempt small shorts very near term. Dips lower should remain well supported circa the 0.8507 200 day ma and will need to move back below here for attention to revert to the 0.8401 22nd February low once more."