I’ve always got an eye on this pair as regular readers will know and sometimes it has more of a role to play than others.
I’ve highlighted the 0.8190-8200 a few times recently starting here and challenges to break lower over the past couple of days have failed yet again with another run higher this morning to decent offers around 0.8225.
But if Draghi does push the button today on some kind of easing ( and I share Ryan’s view that the latest factory orders/output data is a concern as I highlighted when posting the numbers) I would expect the 0.8190 area to be tested again with 0.8165-50 the next target area which could then push GBPUSD through the large elephant barrier in the room at 1.7000 intially but we would also expect EURUSD to drop and that in itself would drag GBPUSD lower too.
If, however, Draghi & Co do nothing again then we will almost certainly see the large 1.4000 barrier tested if the market has grown tired of/resistent to the jawboning lower mantras which in turn will see the 1.7000 barrier tested too but also capped by the expected EURGBP buying to/beyond 0.8250-65 and maybe to the next bunch of offers at 0.8285 and larger at 0.8300
EURGBP H4 May 8
Get my drift here? Either way Draghi and the euro go later we have all three pairs close to very important levels with EURGBP bound to be an influence on proceedings should it all kick off. Worth revisiting the orderboard here anyway.
As ever, we must wait to see and not to pre-empt. But be ready.
