Trading range of 1.26 – 1.30 to be broken Shortly?
For the past few weeks now we’ve seen the GBP/EUR rate trading between a trading range of 1.26 up to 1.30, with the short term ceiling of 1.30 looking most likely to be broken as I write this, as the British currency continues its gradual recovery from what some might refer to as ‘Borisgate’.
Leading up to and after Boris Johnsons weekend announcement that he was lending his support to the ‘Leave’ camp, Sterling sellers saw the currency bounce off of 1.26 two times, and as headlines surrounding Britain’s potential ‘Brexit’ are no longer dominating the headlines to such an extent, it’s coincided with a boost in the value of the pound leading me to predict and break through the current resistance of 1.30 and establishing a new trading level above the key 1.30 level.
News to have an impact?
Upcoming economic news releases with the potential to push the recovering pound through its current trading channel consist of this morning’s Consumer Inflation Expectations at 9:30, next week’s European GDP figures coming out on Tuesday, the UK’s NIESR GDP estimate on Wednesday followed by the ECB Interest Rate decision on Thursday.
Although the upcoming EU referendum is likely to put pressure on the pounds value as the 23rd of June gets closer, in the short term I’m expecting Sterling strength and should the economic data released today and next week paint a brighter picture of the UK economy I’m expecting a break through 1:30.