Pound sterling to euro exchange rate Outlook: GBP/EUR breaks above 1.19; is 1.20 achievable?

At 09:37 we see the pound sterling to euro exchange rate trading 0.1 pct higher than seen at last night's close.

GBP/EUR is at 1.1905.

EUR/GBP is therefore at 0.8399.

Looking at the currency charts we note that within the short-term timeframe of 2 to 6 weeks the Euro has managed to arrest a decline seen at the front end of the charts.

The level at 0.84 (GBp/EUR @ 1.19) has thus far formed a reliable level of support for the euro.

Any advances away from here will be hard fought for; indeed even this morning's pro-GBP vibe has so far proved unable to really shoot sterling towards the 1.2 level.

The technical configuration currently driving the currency is well balanced with 6 pro-GBP events cancelled out by 6 negative-GBP events suggesting that no currency has an advantage at present.

However, it is when we step back and take a look at the longer-term timeframe of 6 weeks to 9 months that we realise that sterling is still favoured.

The price charts show 5 pro-sterling events and no pro-euro events.

The last event working against the euro is the formation of a weekly Triple Moving Average Crossover (4-week 9-week 18-week) on the 20th of September.

However, even for this timeframe it would seem the 0.84 / 1.19 level will continue to prove hard to crack.

Carney sends euro pound exchange rate lower

Turning to the more fundamental drivers behind the pound euro exchange rate it was an interview of BoE Carney to the Yorshire Post that woke up market participants.

Carney said “My personal view is, given the recovery has strengthened and broadened, I don’t see a case for quantitative easing and I have not supported it.”

Commenting on the reaction, Piet Lammens at KBC Markets says:

"EUR/GBP immediately dived below 0.84, to about 0.8360, but currently there is no follow through buying. EMU economic confidence might be constructive, but we don’t expect it to have a large positive impact on the euro.

"On the other hand, sterling is testing key resistance in the 0.84/0.8352 area, and is maybe not ready to make a clean break. Anyway, month end positioning may play a role too."