Market Analysis-SRO 1207

EURO-BPOUND-CROSS RATE

The daily configuration of the EURGBP reflects a more positive tone (bullish) from a support price level at 0.8500/10 (S2) and 0.8535/40 (S1) respectively. Prices has held above these levels contrary to the bearish weekly candlestick formation that defines its directional trend lower. However, this is only temporary before it continues its directional trend lower. 

The fundamental actions of a concerted central bank intervention supported these technical price levels equivalent to the 1.3180 EURUSD support which has been defended from further depreciation and the current summit meetings with the EU leaders to really find a resolution for the debt crisis. Thus the Tug of War between the two continents carefully watching the developments that ultimately affects the financial markets and spill over to Asia region. Otherwise, the only remaining concern is whether these rating agencies would downgrade a majority of these other countries as a whole since it has dragging the overall global economy to almost a stand still, so to speak. 

EURGBP DAILY 1207



On the other hand, the resistance levels for the EURGBP cross is at the 0.8660/80 (R1) and 0.8770 (R2) trading range levels. The curent price as of this writing is at 0.8598 slightly above the 21 day MA in line with the EURUSD attempting to drive the prices at its 1st resistance (R1) price of 1.3500. The slightly positive news from the EU zone is supporting this recent action in the European session after the Asian trading Wednesday. Though, this can only mean that a probable corrective move is in the making within a major bearish weekly chart for the cross. And this also holds true for the EURUSD major currency.

The GBPUSD has held its ground reflecting a limited upside for the EURGBP cross, though the potential for such upward correction is seen as of today. A mid-week move higher would not be discounted as trading volumes would appear and book-squaring may start as early has the middle of the month.

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