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EUR/GBP – Key support holding

A bullish signal?

With both the ECB and BoE meetings now behind us, how do we assess the impact on the currencies and what it means going forward?

Interestingly, there were no major surprises on either side. The BoE moved slightly earlier while the ECB tweaked its asset purchases, with the result being that the PEPP comes to an end in March while the support it provided is only slowly phased out over an additional six months.

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In terms of the technicals, there may also be some interesting takeaways. The spike lower yesterday saw the pair run into support around the 61.8 fib (4-hour chart) before quickly recovering to sit back above the 50 fib and 200/233-period SMA band.

This had been key support prior to the meetings and remains so now. If 0.85 holds, it could potentially be a very bullish signal going into the new year. Another failure and the long-term downtrend may continue.

This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Craig Erlam

Craig Erlam [5]

Senior Market Analyst, UK & EMEA at OANDA [6]
Based in London, Craig Erlam joined OANDA in 2015 as a market analyst. With many years of experience as a financial market analyst and trader, he focuses on both fundamental and technical analysis while producing macroeconomic commentary. His views have been published in the Financial Times, Reuters, The Telegraph and the International Business Times, and he also appears as a regular guest commentator on the BBC, Bloomberg TV, FOX Business and SKY News. Craig holds a full membership to the Society of Technical Analysts and is recognised as a Certified Financial Technician by the International Federation of Technical Analysts.
Craig Erlam
Craig Erlam

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