A strong day for the euros to pounds pair which received a major boost from the BOE Governor Mervyn King whose comments regarding a weak sterling being helpful to the UK economy at present, resulted in a massive sell off in the pound across all the major and cross currency pairs yesterday, with the euros to pounds pair benefiting as a result, and ending the trading session with a wide spread up bar which has propelled us towards our initial short term target of 0.93. Mr King’s comments have not been well received by other members of the G20 meeting which is currently taking place in Pittsburgh, and in the article published in a regional newspaper he stated that in terms of the economy and UK trade figures : “I think the fall in the exchange rate that we have seen will be helpful to that process but there’s no doubt that what we need to see now is a shift of resources into net exports – whether directly or in producing things that compete with imports that help to reduce the trade deficit.’ His comments have angered many at the G20 meeting which are seen as unhelpful to other members of the group!
Technically we are now at an interesting point with yesterday’s wide spread up bar, adding significant momentum to the bullish sentiment already in place on the daily euros to pounds chart, as we now approach the significant resistance level between the 0.92 and 0.9450 price levels which will determine whether we see a further run back to parity, or whether the move is snuffed out at this level. With all three moving averages providing excellent support to the move, we should see an attempt to breach this level in the next few days and if the rate holds above the upper level at 0.9450, then we could see a retest of the early 2009 top at the 0.9650 region once again towards the end of the year.
The fundamental news on the economic calendar is covered for you on two other sites, and for the euro it is on the euro to dollar, whilst for the UK pound it is on the pounds to dollars site. You can keep up to date with all the latest fundamental news on the economic calendar, latest currency news and live currency charts by simply following the links. I have also included details on an excellent ECN broker.
