26 Mar 2015
EUR/GBP challenging the 0.74 area – KBC
FXStreet (Barcelona) - The KBC Bank Research Team gives the outlook for EUR/GBP, maintaining a short-term neutral/ wait-and-see bias on the pair, and further comment on the UK retail sales data release.
Key Quotes
“This morning, sterling is a bit more sensitive to the rise in global volatility than the euro. EUR/GBP is nearing the 0.74 big figure.”
“Today, the official February UK retail sales and the March CBI reported sales will be published. For both series a rebound from a poor reading over the previous month(s) is expected. We see even chances for a positive surprise. Question is whether such an outcome will be enough to change fortunes for sterling.”
“The global context will play a role too and we have the impression that EUR/USD is currency more resilient to a global risk-off correction than is the case for cable.”
“Recently, we advocated to protect EUR/GBP shorts against a temporary countermove and were in no hurry to reinstall EUR/GBP shorts as we want to see the reaction of sterling to elections news.”
“The correction in EUR/GBP last week was already substantial. Even so, we want a clear sign that the correction has run its course before reconsidering new EUR/GBP shorts. We didn’t get such a signal yet.”
“Any decline in EUR/GBP will probably be due to euro weakness rather than a sustained rebound of sterling.”
“We keep a neutral/wait-and-see bias on EUR/GBP short-term.”
Key Quotes
“This morning, sterling is a bit more sensitive to the rise in global volatility than the euro. EUR/GBP is nearing the 0.74 big figure.”
“Today, the official February UK retail sales and the March CBI reported sales will be published. For both series a rebound from a poor reading over the previous month(s) is expected. We see even chances for a positive surprise. Question is whether such an outcome will be enough to change fortunes for sterling.”
“The global context will play a role too and we have the impression that EUR/USD is currency more resilient to a global risk-off correction than is the case for cable.”
“Recently, we advocated to protect EUR/GBP shorts against a temporary countermove and were in no hurry to reinstall EUR/GBP shorts as we want to see the reaction of sterling to elections news.”
“The correction in EUR/GBP last week was already substantial. Even so, we want a clear sign that the correction has run its course before reconsidering new EUR/GBP shorts. We didn’t get such a signal yet.”
“Any decline in EUR/GBP will probably be due to euro weakness rather than a sustained rebound of sterling.”
“We keep a neutral/wait-and-see bias on EUR/GBP short-term.”