GBPEUR had a great week last week pushing up to €1.2 levels as the pound finally showed it had some fight left in it. Unfortunately for euro buyers however this week has started on a very different note as weak UK data yesterday provided a catalyst for a sell-off which pushed the pound 4 cents lower to €1.17.
Failure to advance above the €1.21 to €1.22 region concerns us as this was a very strong region of support or a floor in the market prior to the pounds crash on the 12 November. This floor has become a strong resistance level or ceiling, so the fact that we have fallen back from there suggests the trend lower will now resume and should test last months low at €1.15. The interest rate decisions from the Bank of England and European Central Bank on Thursday are hugely important in determining GBPEUR direction so watch this space.
Tuesday, 2 December 2008
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