GBP to EUR technicals: 0.8500 level held firm and the EUR failed at its first major hurdle

Monday, 12 March 2012 13:57

GBP to EUR: A morning technical forecast note from RBS notes that the "0.8500 level (EUR-GBP) held firm and the EUR failed at its first major hurdle."

Analysts urge those with an eye on the exchange rate to watch now for a breaking of this trend line of support and the important 0.8315 level for the long term downside objectives at 0.8192 and 0.8069 to be realised.

"Still the bias is for this tight ranging period to break lower!" says the technical note. 

Pressure is building up and all the short term moving averages are beginning to converge implying some kind of break out is about to occur.

The RBS note says:

"Still the bias is for this to be to the downside and that will be confirmed once the market trades sub 0.8315, expect the break out to be relatively compulsive to what
has been witnessed in price action so far in 2012. As stated above my ‘wrong’ level is if and when the market closes above 0.8500.

"There are two key filters approaching for this GBP bullish picture to realise; the first is the trendline holding, this trades around 1.5536 this week and 1.5575 next week.

"This trend line has been a good barometer of GBP strength over the past 3 years. The second if that line were to be broken is the 1.5299 level which caught price action last time this trend line support was broken.

"If price action were to break below here this would be extremely GBP negative. Whilst these events haven’t happened and the trend line holds I’m long term GBP optimistic targeting 1.6041/6167."