EURGBP was previously trading inside a range with support around .8400 and resistance at .8800. Just recently, the pair broke past the resistance to signal that buyers are taking hold.
Price closed back below the resistance in a quick pullback at the end of the previous week but is now reestablishing the climb. However, the 100 SMA is still below the longer-term 200 SMA to signal that the path of least resistance is to the downside.
Stochastic is also on the move down to show that sellers might regain control of price action. However it also appears to be turning higher to suggest that buyers are putting up a fight.
The UK elections resulted in a hung parliament, which means more political uncertainty as the government moves closer to the start of Brexit negotiations. Traders are now looking to the Queen’s speech next week and to upcoming top-tier UK data to see if the economy can weather this potential storm.
UK CPI is lined up first and no change in the headline reading of 2.7% is eyed. Core CPI could dip from 2.4% to 2.3%. Later in the week, UK retail sales and jobs data are due but the bigger mover might be the BOE decision.
Meanwhile, the euro has gained support on a stronger political showing in France. Macron’s government is highly expected to secure legislative majority, which could mean an easier time for them to pass reforms. German ZEW economic sentiment index is due today and a rise from 20.6 to 21.6 is eyed.
By Kate Curtis from Trader’s Way