Pound Sterling's multi-week advance against the Euro could be in the process of reversing in the short-term according to the latest studies of the EUR/GBP charts conducted by one of the industry's leading technical analysts.
Foreign exchange strategists at Westpac - the Australia-based international investment bank - have told clients they see value in buying Sterling against the Euro.
The Euro-to-Dollar exchange rate, which has risen strongly in October, is expected to continue, says Citibank, and is a "buy on dips" candidate.
If risk fades it should help the safe-havens like JPY, CHF and USD, whilst weighing on commodity currencies like AUD and NZD.
From a purely technical and quantitative point-of-view, the charts are showing signs of a bias to a positive outcome to negotiations and for the Pound to make more gains in the short-term.
The Pound-to-Dollar exchange rate is forecast to extend lower by strategist Russel Sandiford of ACY Securities.
The Euro-Dollar's decline within a falling channel is forecast to extend, and rallies are viewed as a chance to sell the pair at a better price.
The Euro-to-Dollar exchange rate came under renewed pressure at the start of the week, with Eurozone economic data prompting the pair to fall below the psychologically significant 1.10 level and some foreign exchange strategists are looking for further downside to emerge for the pair.
The time to buy the Pound and sell the Euro is approaching says one institutional strategist willing to row against a trend of selling pressures.
Foreign exchange strategists at Westpac - the global investment bank - have told clients the Pound could now well be due a recovery against the Euro, recommending clients sell the EUR/GBP exchange rate.
“For June we recommend buying a seasonal basket which is long 50% AUD, 25% CHF, 25% CAD and short 50% NOK and 50% USD”- SEB.
The Euro will rise in the second half of 2019 as the ability of the Eurozone to ‘export capital’ declines, limiting the extent of outflows, and this will reduce Euro-selling, says Hans Redeker, chief global FX analyst at Morgan Stanley.
Foreign exchange strategists at Westpac have issued a trade idea of buying Pound Sterling against the U.S. Dollar in anticipation of further advances.
Investment bank Morgan Stanley are forecasting a stronger Pound-to-Euro exchange rate over coming weeks saying they expect political uncertainty to start fading.
"GBP/USD looks mostly neutral in short term," say brokers XM.
The Pound-Yen pair looks poised to extend higher towards targets in the 153.00-156.00 range as it breaks out of a bullish wedge pattern.
It has formed a bullish chart set-up called a pivot swing on the monthly chart, which suggests the potential for a rotation higher subject to a break above a key confirmation level.
According to Glynn, the Dow Jones has now entered a steep, long-term, bear market, which will probably last several years and take the Dow all the way back down to the 15000-18000 region where it was in 2015.
The Pound is on course to hit an 18-month low against the Dollar in the New Year, according to analysts at BMO Capital Markets, who say "unresolved Brexit issues" will cause the British currency to underperform during the months ahead.
USD/JPY is likely to remain trapped inside a rangebound market in the short-term as a host of factors, including moving averages, trendlines, 'month end' flows and option expiry levels limit the pair's freedom of movement.
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