Euro In Strong Recovery, Analysts Predict Consolidation Above 0.84

The British pound continues to suffer selling pressure against the Euro ahead of tomorrow's Carney speech:

"GBP is being left behind as the sell recommendations start to increase ahead of BoE Governor Carney's speech tomorrow. .8622 is the next resistance level for EUR/GBP, while it's not so long ago that .8630 was an almost irresistible pivot point," FX Market Alerts tell us.

Recovery ahead for Euro / Pound exchange rate

Gareth Berry at UBS is forecasting a further recovery for EUR/GBP:

"The cross has been consolidating over the past few sessions and any further recovery should find resistance at 0.8606. Support is at 0.8505 ahead of 0.8398."

Sell EUR/GBP into strength

Piet Lammens at KBC Markets takes a different stance to that held by Berry saying support lies ahead:

"After the August repositioning, EUR/GBP has incorporated the recent improvement in the UK eco data. Even so, we think that the downside in sterling has become well-protected.

"The pair is now more or less in the middle of a broad sideways consolidation pattern between 0.8800 and 0.8400. The easy part of the sterling gains against the euro should be over. Nevertheless, we still prefer to play the above-mentioned range from the topside and use more pronounced up-ticks sell EUR/GBP into strength.

"First support is seen at 0.8469, while 0.8398 marks the MT range bottom."

Global markets struggle, safe haven currencies bid higher

Commodity currencies are struggling once more today driving safe haven demand for GBP, USD, CHF, JPY and EUR.

Shavaz Dhalla at Spreadex says:

"Global markets continued to struggle today as news reports that some nations, including the US, are now ready to launch an attack on Syria if they are given the go-ahead by officials.  However, equity markets are still yet to really panic over the prospects of a number of western countries mounting another possible military intervention in the Middle East.

"Nevertheless, oil is rallying towards a five-month high as investors remain concerned that supplies of oil may dwindle as a result of military action.

"Italy is back on the agenda today as more political turmoil troubled investors.  The current disparity centres around politicians’ disagreement as to how, and to what extent, taxes on main residences should apply.  

"Berlusconi’s centre-right party are demanding the abolition of the tax if the coalition is to continue.  Such threats are particularly problematic for the markets as although the Italian coalition is unlikely to fall apart as a result of a dispute on housing taxes, it does provide an insight as to how unstable the government actually is."