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23 Feb 2016
GBP: Under significant pressure – Lloyds Bank
Research Team at Lloyds Bank, suggests that the sterling has come under significant pressure, gapping lower on the open in Asia and then further pressure on the London open this morning.
Key Quotes
“We are now testing important near-term support in the 1.4200/1.4180 region, with a break here likely to see a re-test of the 1.4080 lows set at the end of January 2016. As we have highlighted over the last few weeks, the trend from the 1.72 highs set back in 2014 and then the reaction highs at 1.5930 set in 2015 remains intact. Key trend resistance held at 1.4650 and while this area holds, the technical outlook remains bearish for a move to eventually re-test the major 1.40-1.35 support zone that has held since the mid-1980’s. Interim resistance lies at 1.4480/1.4500.
EURGBP: We remain trapped in the 0.77-0.79 range we have been in for the last two weeks or so. While over 0.7725 the technical bias is for a break-up through 0.79 opening a further extension into more important long-term resistance in the 0.80-0.82 region. To start to alleviate pressure on sterling, we would need to see a decline back through key supports lying at 0.7725, 0.7625 and then 0.7450. Such a decline would suggest we are moving back into a range-trading environment, similar to that which we saw all of last year over key support at 0.70/0.69.”
Key Quotes
“We are now testing important near-term support in the 1.4200/1.4180 region, with a break here likely to see a re-test of the 1.4080 lows set at the end of January 2016. As we have highlighted over the last few weeks, the trend from the 1.72 highs set back in 2014 and then the reaction highs at 1.5930 set in 2015 remains intact. Key trend resistance held at 1.4650 and while this area holds, the technical outlook remains bearish for a move to eventually re-test the major 1.40-1.35 support zone that has held since the mid-1980’s. Interim resistance lies at 1.4480/1.4500.
EURGBP: We remain trapped in the 0.77-0.79 range we have been in for the last two weeks or so. While over 0.7725 the technical bias is for a break-up through 0.79 opening a further extension into more important long-term resistance in the 0.80-0.82 region. To start to alleviate pressure on sterling, we would need to see a decline back through key supports lying at 0.7725, 0.7625 and then 0.7450. Such a decline would suggest we are moving back into a range-trading environment, similar to that which we saw all of last year over key support at 0.70/0.69.”