British Pound Sterling: GBP-AUD on the up, but is the strong run against EUR coming to an end for the UK currency?

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Published on Thursday, 12 July 2012 09:13

Written by Will Peters

International Money Transfers at our sister site

"Of late, sterling has run a very strong course and the EUR/GBP dropped below several support levels" - KBC Markets.

The pound sterling (Currency:GBP) has certainly had a good run against the euro of late, but has this strength come to an end? See below for details!

Meanwhile a quick glance at the markets show:

The pound euro exchange rate is 0.06 pct in the red at 1.2663.

The pound dollar exchange rate is 0.25 pct lower at 1.5462.

The pound Australian dollar exchange rate is 0.77 pct higher at 1.5233.


So it would seem that it is the pound Australian dollar pair that is having all the fun this morning. No doubt this will have a lot to do with fears that the RBA could cut interest rates further following a bout of poor jobs data released earlier today.

The pound dollar pair (known as cable) is meanwhile facing a bout of weakness:

"After a mid-day spike higher towards resistance at 1.56, Cable gave back its gains as the bears got the upper hand.  Expect further weakness over coming days as it continues to creep towards the early 1.50 area," says Manoj Ladwa at TJ Markets.

The big question though, as mentioned at the top of this article, is whether the pound euro exchange rate has run its course?

KBC Markets, in a morning note to clients, believe this indeed could be the case:

"Today, there are again no important eco data in the UK. Of late, sterling has run a very strong course and the EUR/GBP dropped below several support levels. As is the case for EUR/USD, the euro downtrend is well in place.

"However, for this cross rate (EUR-GBP), we have the impression that the move is losing some momentum.

"The technical charts also give some kind of doji-like signal, suggesting that the trend might be a bit exhausted short-term. So, we don’t change our fundamental euro negative bias, but in a day-to-day perspective, there might be room for some consolidation or even a cautious countermove. Short term profit taking/stop loss protection can be considered."