Euro Cross Pick 09.17.2012
As market participants turn their attention to the Bank of England Minutes due out on September 19, we may see the short-term rally in the EURGBP taper off ahead of the policy statement, and the pair looks poised for a move to the downside as the relative strength index continues to show an overbought signal. As the EURGBP remains capped by the 78.6% Fibonacci retracement from the 2008 low to high around 0.8140-50, we are looking to fade the rally from the July low (0.7751), but we will wait for the RSI to push back below 70 as the pair appears to be carving a lower top in September. Our bias remains tilted to the downside as the sovereign debt crisis dampen the outlook for the euro-area, while the sterling looks poised to outperform against its major counterpart as the BoE appears to be slowly moving away from its easing cycle.
DailyFX provides forex news and technical analysis on the trends that influence the global currency markets.
Learn forex trading with a free practice account and trading charts from FXCM.
