Elliott Wave Pattern and Hawkish ECB Pointing Towards Higher EUR/GBP

Forex Fundamentals

Markets are slow, with USD trading in a tight range, while US stocks found some support after breaking to new lows yesterday. The reason for a slow down of trading activity can be due to important US CPI figures later today which can be the main driver for the direction going forward as data is important for FED’s policy decisions.

Early today we are hearing again hawkish ECB comments. ECB’s Villeroy mentioned that they will start raising rates this summer which prevents traders from shorting the EURUSD pair today; it’s stuck in the range. Instead, some of them can be focused more on the EURGBP upside as BOE turned out to be more dovish recently.

Elliot Wave Analysis for EUR/GBP

From an Elliott wave perspective, we see EURGBP changing the direction after five waves down to 0.8200 from where market rallied out of a downward channel so looks like bulls are here, possibly for 0.8660 targets in the near term.

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Trade well,

Gregor