EURGBP appears to have made yet another bounce off the bottom of its long-term range. Price tested the .7000 major psychological level recently and is staring to make its way higher.
Stochastic is starting to head back up from the oversold area, indicating a return in bullish momentum. Similarly, RSI is also climbing out of the oversold region to show that buyers are regaining control.
The 100 SMA is below the 200 SMA for now but an upward crossover seems imminent. The moving averages are edging closer together and a crossover could add confirmation that a rally is in the cards.
Earlier this week, the BOE Inflation Report hearings were held, highlighting the shift of a less upbeat tone for the UK central bank. This echoes their less hawkish sentiment shared during the BOE statement and minutes, indicating that policymakers are inclined to keep rates low for much longer.
Meanwhile, the euro is recovering against most of its forex peers, following the terror attacks in Paris and the dovish ECB statement. On Monday, PMI readings from Germany and France came in mostly stronger than expected.
The only major events lined up from the euro zone are the Spanish flash CPI and French consumer spending data due on Friday. Meanwhile, the UK is set to print its second estimate GDP reading for Q3 and probably show no change from the initial 0.5% estimate.
By Kate Curtis from Trader’s Way