EUR/GBP analysis: Adopting a cautious approach as Grexit looms – KBC

FXStreet (Barcelona) – The KBC Bank Research Team notes that EUR/GBP outlook remains negative, but some caution is warranted as long as Greece uncertainty persists.

Key Quotes

“This morning, cable and EUR/GBP are in the first place driven by the fall-out from the Greek debt crisis. Cable dropped the 1.5665 area in Asian but rebounded to trade at around 1.5720 at the moment of writing. So, the negative fall-out from Greece on sterling looks fairly limited. EUR/GBP traded already temporary below the cycle low (0.7014) and even below the 0.70 barrier, but returned to the 0.70 area going into the open of the European trading session.”

“Of late, we had a cautious sell-on-upticks approach and expected EUR/GBP to drift lower in the 0.7483/0.7014 trading range. Sterling momentum remained constructive, but we turned more cautious on the sterling rally towards the end of the week as EUR/GBP moved to the lower part of the established trading range.”

“Of late, we kept the working hypothesis that high profile news is needed to push EUR/GBP sustainably below 0.70. Of course, recent developments in Greece might turn out to be such a high profile event. The day-to-day momentum remains EUR/GBP negative, but we remain cautious as long as uncertainty on Greece persists.”

The KBC Bank Research Team notes that EUR/GBP outlook remains negative, but some caution is warranted as long as Greece uncertainty persists.

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