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Round Up – New Highs in EUR & GBP

James Boston
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A round of GDP data out of Europe is driving the Euro higher and providing the momentum for the single currency to challenge the upper bound of its medium term range. EURUSD is attempting to break through the 1.37 resistance level for the second time in 3 weeks on the back of both German and France quarterly GDP figures coming in ahead of expectations. France posted 0.3% growth against a consensus of 0.2% while Germany recorded 0.4% against an expectation of 0.3%.

Italy and Portugal are also due to report quarterly GDP figures later this morning, however a range breakout for the Euro, if it is to come, will be driven by the key Eurozone GDP number due at 11am GMT this morning. Markets are expecting a print of 0.4% here, there won’t be a need to beat this consensus, simply confirming that the Eurozone is in a growth phase will be enough to attract Euro buyers and any sustained move above 1.37 will bring the long term EURUSD high of 1.3803 into play.

The rise of Sterling looks unstoppable, Cable has taken out its medium term resistance at 1.6633, reaching a high of 1.6693 before settling back. GBPUSD is now eyeing the significant 1.6737 level, a high set in May 2011.

The British data calendar is empty for the next couple of days so it will fall to some minor US releases later this afternoon to lend the necessary impetus to this currency pair. Michigan Consumer Sentiment is due just before 3pm GMT, this is already expected to be lower than previous and any figure below 80.5 is likely to trigger a Dollar sell off. Whether this would be enough to set new highs on GBPUSD and EURUSD is questionable, what is beyond question is that Dollar weakness will contribute to these higher levels, if not today then likely in the next week.

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