Best GBP/EUR Exchange Rates of 2015 Possible Once More
The GBP to EUR conversion has rebuilt upside momentum and could test its best levels of 2015 again.
Sterling has broken through the key resistance zone of 1.40 as we head into the new month.
The strong move higher will be seen by some as a sign of intent ahead of the new month.
Be wary of any pullbacks though - the move higher through the second half of October has been powerful and the GBP/EUR could be deemed at risk of a technical pullback.
Indeed, the Relative Strength Index (RSI)on the daily charts is now at 70 - anything above 70 is deemed to be oversold. The RSI tends to trend around the 50 level which signifies a ‘healthy’ equilibrium.
The last time we saw the RSI at these levels was in July - about the time when the sterling to euro exchange rate fell from its 2015 best.
That said, all other key technical indicators are looking healthy; notably the GBPEUR is now trading above the 100 day moving average, a move that advocates for further gains.
Latest Pound/Euro Exchange Rates
  | Live: 1.1452▲ + 0.08%12 Month Best:1.2162 |
*Your Bank's Retail Rate
| 1.1063 - 1.1108 |
**Independent Specialist | 1.1292 - 1.1337 Find out why this is a better rate |
* Bank rates according to latest IMTI data.
** RationalFX dealing desk quotation.
Jeremy Stretch at CIBC says he favours the sterling to advance further from here, even amidst S&P warnings over a potential debt downgrade on Brexit.
While the other two big ratings agencies stripped the UK of its AAA rating in 2013 S&P have maintained it, although the outlook was downgraded to negative from stable back in June.
Stretch says there is therefore a one in three chance of a downgrade within two years, irrespective of EU renegotiations.
“While Brexit concerns remain a long term risk parameter for Sterling for now it’s consumer resilience and monetary policy divergence that continues to favour a lower EUR GBP outlook,” says Stretch.
