Pound-to-Euro Exchange Rate Week Ahead Forecast: Bearish Bias

GBP/EUR has now once again broken out of it's long term rising channel - the same channel it only recently clawed back into the week before last; this is a bearish sign for the pair.

Sterling could suffer significant downside if Theresa May loses an imminent vote of confidence we are told by a foreign exchange strategist.

The Pound-to-Euro rate plummeted Thursday after the Prime Minister's Brexit Secretary resigned from office, leading markets to fret that the risk of a "no deal Brexit" is rising rapidly. 

Investment bank Morgan Stanley are forecasting a stronger Pound-to-Euro exchange rate over coming weeks saying they expect political uncertainty to start fading.

"Theresa May’s Brexit deal crashes" is a headline that could put the Pound on the backfoot against the Euro this week; but the GBP/EUR exchange rate's technical setup remains positive and bodes for further gains.

Pound Sterling's rally against the Euro takes the GBP/EUR exchange rate to a five-and-a-half month high at 1.1480; levels last experienced in May. We are nervous of the advance extending and are biased to a retracement lower.

The world's largest investment bank is backing the British Pound this week saying it is buying Sterling and selling Euros via options amidst signs of progress in Brexit negotiations.

Euro exchange rate complex at risk should the ECB jettison interest rate rises in 2019 in view of slowing economy.