Ichimoku Kinko Hyo CNH/JPY: The CNH/JPY pair is trading above the Kumo…
EUR/GBP: technical analysis
Information is not investment advice
Brexit goes hard. Boris Johnson’s position is “if the UK sees no possibility to make a deal with you by October 15, we will quite talks”. The EU’s position is “Ok, quit”. Both sides seem adamant to stick to their red lines and not cede an inch of the negotiation table. Or, better said, not a single fish to the counterparty. However, unofficial sources report to Bloomberg say this these rigid stances may be just an overture to accord or at least a progressive step forward to continue the discussion into the second part of October. Next week will show whether that may be true. In the meantime, EUR/GBP is waiting for input.
Since the last week of September, EUR/GBP trades between two ranges: 0.9060-0.9070 as the support range, and 0.9140-0.9150 as the resistance range. After an upward march within this channel since October 2, the pair bounce down from the resistance to slump the middle of the channel – again. Therefore, in the short-term, look at 0.9080 as the closest target for bears.
On a larger timeframe, EURGBP is going down since the beginning of September. If it goes through the support range of 0.9060 – 0.9070 without consolidating at these levels, it will likely drop to the psychological 0.9000. So far, that’s just a faraway scenario but it is a possibility to keep in mind.
On Thursday, the 2nd of February, the Bank of England will publish its report concerning interest rates and inflation data for the Eurozone. Professionals and investors anticipate that Andrew Bailey’s lead team of policy makers will likely raise interest rates to 4%; the highest in over a decade, for the tenth time in a row.
The first FOMC meeting comes after a buildup of anticipation from traders and investors alike, as the markets await what posture the Fed will take regarding the interest rates; would there be a hike or a cut in interest rates? Recall that the Federal Open Market Committee had previously ended the year 2022 with a 50bps hike, and an indication from Powell, the committee chairman, that the Fed could consider raising interest rates by 75bps in the course of the year 2023.
Western countries are trying to find other options for oil and gas supplies after a 10th package of sanctions, which will put more pressure on Russian oil and decrease global oil supply. Italy, for example, is in talks with Libya.