Currency - GBP / Euro

Having tested the highest level in 19 months against the Euro, the Pound slipped on Friday after poor UK manufacturing data and as profit takers bought back some of the Euros they had been selling for the whole of the previous fortnight. However, the Pound is still above a significant trend line support level at 1.1950 or thereabouts and a number of other support lines based on moving averages and Fibonacci retracements (I can see your eyes glazing over so I will stop there). Suffice to say, they are a number of reasons for the Pound to stay above €1.19 an as long as it does so, another push to test €1.21 is on the cards. With the Eurozone problems as worrying as they have ever been and the warnings from the Bank of International Settlements over the weekend ringing in our ears traders have all the incentive they need to sell rather than buy the Euro. That means, as long as this exchange rate stays above €1.19 you can wait for a better Euro rate before you have to buy. The caveat is that if this spends any time below €1.19, we are heading for much lower levels and €1.15 is the initial target.