EUR GBP

EUR/USD continued an aggressive sell-off but EUR/JPY put in a clean breakout from an ascending triangle. Meanwhile, EUR/GBP has set the initial steps for a possible bounce.

Despite international factors, domestic concerns remain for the German economy, discouraging us to be very bullish on the EUR/USD forecast, despite the dollar’s overall bearish trend. Indeed, looking at euro crosses such as the EUR/GBP, which is approaching its post-Brexit lows, you can see that there is very little underlying strength for the euro and that the EUR/USD’s weakness is masked by a weak US dollar right now.

We have seen further widening of the bond yield spreads between German and French debt today. Investors are clearly worried about a sustained period of political uncertainty and are therefore seeking haven assets and reducing their risk exposure.

Euro pairs gapped lower at Monday's Asian open on news of Macron's snap election following painful election results for the left. EUR/USD broke beneath its 200-day EMA and EUR/GBP fell to a 22-month low.

A quick look at the charts suggests the British pound might be nearing a burst of energy, and that could be beneficial for GBP/USD bulls or EUR/GBP bears.

Gold and oil were higher in Monday’s Asian session in response to weekend news that Israel had declared war against Hamas. With the potential that this could spread into a wider Middle East conflict, gold sucked in safe haven flows whilst oil was higher on supply concerns.

With the US dollar having fallen for three days ahead of today's PCE inflation report, we're going to need to see some soft numbers for the US dollar to move materially lower from here. So could that could leave an upside surprise and subsequent rally for the US dollar if inflation is hotter than liked? Either way, 1.0900 is likely to be pivotal level for EUR/USD today, and a host of European data points also puts EUR/GBP into focus ahead of the inflation report.

GBP/USD looks to US data for clues on the Fed’s next move. EUR/GBP holds steady ahead of German inflation.

At 0.1% y/y, China’s consumer price inflation is at levels other economies can only dream of. Next up the BOE’s monetary policy decision.

EUR/GBP falls as more BoE rate hikes are expected. Oil edges lower ahead of EIA stockpile data.

EUR/GBP falls after UK GDP & ahead of EZ CPI. Gold rises ahead of US core PCE brining $2000 into focus.

EUR/GBP falls after UK jobs data. USD/JPY rises ahead of US inflation data.

EUR/GBP rises ahead of inflation data. Nasdaq breaks below the 200 sma ahead of US jobless claims data.

EUR/GBP digests the post-Brexit deal agreed & looks to Spanish & French inflation. USD/CAD rises ahead of US consumer confidence & Canada GDP.

EUR/GBP looks to a new Brexit deal. Gold falls ahead of US durable goods orders.

EUR/GBP looks to inflation data, BoE speakers. S&P500 rises post FOMC minutes & ahead of US GDP data.

Both EUR/GBP and EUR/GBP are hugging various pivot points ahead of the open, but whichever way they break initially our bias is for a break to new lows.