Stop me if you've heard this one before ( of course you have 'cos I'm a boring old git and you can read a sample of recent posts by clicking here!) but a rally by GBPUSD has been thwarted yet again - this time at 1.5400 - by EURGBP demand which is now testing recent highs again
The general euro demand this morning is prevailing after a post-CPI/PPI dip on GBP gave a lift to 0.7428 only to return back to 0.7410, and we can now expect this area to produce bids ahead of any renewed attack on 0.7370
In my previous posts I've questioned the rationale behind selling EURGBP on euro/Grexit concerns and told you that I have been happily jobbing both sides of the 0.7380-0.7430 range but mainly with longs. Conversely by the same logic you can argue that a Greek-led rally in the euro can also be of benefit to GBP given it's possible potential impact for the UK economy too, but with some sort of Greek deal being done then attention will shift back to the UK election uncertainty with May looming ever closer
I'm square again now and looking to see whether this latest rally can extend beyond 0.7450. I think dip-buying is the way to go overall still but a failure to breach 0.7450-55 will be a valid enough argument to job short again.
Key cable support at 1.5330-35 which has already been tested today while offers can still be expected into 1.5400-10 after the earlier failure at 1.5403
Currently 0.7439 and 1.5358
