The Bank of England and the European Central Bank will conclude their monetary policy meetings tomorrow, Thursday (8/7). Let’s take a look at the EUR/USD, GBP/USD, and the EUR/GBP ahead of these key central bank risk events.
The EUR/USD continues to be bearish with no sign of letting up. We can expect some further downside to 1.33, but if this level holds after the ECB event risk, look for consolidation with upside toward the 1.3475-1.35 area. GBP/USD is consolidating this week after a bearish trend in the medium-term. A break below 1.68 opens up the 1.67 lows from May-June, if 1.68 holds and price pushes above 1.69, the bullish correction has the 1.6950 and 1.70 levels in sight. The EUR/GBP has been in a rounded bottom attempt since July. If this bottom is respected after the central bank statements, look for a rally toward the 0.8030 level, and maybe the 0.8065 area. The bullish outlook should be limited to the short-term against a strong bearish trend. A bearish outlook, with a break below 0.7880, would open up the 0.7764, 2012-low.
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