Royal Bank of Scotland - "EUR/GBP looks to be entering anew short term range after itmanaged to break through the pivotal 0.8223 level. Expect the next big resistance level at 0.8504 which is the ’12 high.
So my ‘ceiling’ at 0.8223 turned out to be breeze for EURGBP’s price action, as the market broke through it and even managed a weekly close above it! This changes my view significantly as above this pivotal level technically opens a new range supported between 0.8156/62 –0.8223 and capped by the ’12 high at 0.8504. For now I would rather own EUR over GBP and for the moment can see little reason why this upward trend won’t continue until the ’12 high at 0.8504. There are two other levels of resistance to be aware of before then at 0.8373 and 0.8420. Should I be wrong and the lower end of the range not hold between 0.8156/62 – 0.8223 there is further support at around 0.7951.
GBP/USD Despite 1.6300 being broken by 80 points over the holiday season the bias is still for this level to hold over what should be a ‘Dollar strong’ quarter.
Very little to add to my last weeks comments; I will continue to think that this currency pair will trade very heavy for the majority of this quarter and my ‘wrong’ level is a weekly close above the pivotal 1.6300 level. For this quarter my downside targets are at 1.5829 (Nov ’12 low), 1.56 (Mar ’12 low) and 1.53 (multi year support since Sep ’10). Should I be wrong and the market trade above the 1.6300 level then look to 1.6816 for the next meaningful resistance level."