EUR/GBP Fundamental Analysis October 2, 2012, Forecast

By FX Empire Analyst - James Hyerczyk
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The recent sell-off in the Euro versus the British Pound appears to be coming to an end as Monday's trading action suggests that demand for risk is returning to the marketplace. Better than expected U.S. PMI Manufacturing helped stave off talk of a recession on Monday, driving up demand for equities and commodities. This may be a sign that sentiment is shifting after two-weeks of uncertainty. 

Euro traders are waiting for Spain to approve a bailout that will allow the European Central Bank to begin buying its distressed debt. Additionally, traders are focused on interest rates that seem to be holding steady. Both of these factors may be underpinning the market right now and could encourage fresh buying on Tuesday. Trader are looking for clarity and are willing to trade the long side with conviction if the news from Spain clearly outlines the details of the bailout. 

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