Profit taking kicks in allowing GBP to take a breather against EUR

Friday, 27 January 2012 15:20

Today, there are no high profile eco data on the calendar in the UK and we see exchange rates staying rangebound.

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The GBP to EUR exchange rate is 0.13% lower on the day at 1.1958.

Exchange rates continue to retain range-bound trading patterns, there is not much market-moving news on offer, thus it would seem traders are content to wait for developments next week.

The theme of rangebound trade follows on from yesterday where GBPEUR traders didn’t really know which card to play.

That said, until recently, the GBP to EUR rate had been very volatile of late.

After the open of European markets, it looked as if the euro would have to give back part of the post-Fed gains.

However, the single currency was support by market rumours that the negotiations on the Greek PSI were moving closer to a solution.

EURGBP rebounded off the 0.8351 intraday low.

On the other side of the Canal, the CBI distributive trades report came out much weaker than the market consensus.

EURGBP extensively tested recent highs in the 0.8390 area.

The pair continued to challenge this area during the US trading hours.

However, a clear break toward the key 0.8422 range top didn’t occur.

Some profit taking kicked in late in the session. EURGBP closed the session at 0.8355, compared to 0.8370 on Wednesday evening.

Today, there are no high profile eco data on the calendar in the UK.

So, EUR/GBP trading will be driven by global factors and by the overall performance of the euro.

A positive outcome of the Greek PSI negotiations could be supportive for the euro overall.

However, looking at the price charts, we have the impression that the topside of the euro is becoming a bit difficult, especially as long as there is no high profile good news from Europe.