Pound euro exchange rate is over-bought say Jyske Markets as they also recommend a Neutral stance on the euro dollar rate

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Published on Friday, 20 July 2012 08:36

Written by Sam Coventry

International Money Transfers at our sister site

"We recommend investors to BUY EURGBP with a fairly close S/L at 77.94. GBP has strengthened by 14% over the past year" - Jyske Markets.

The pound to euro currency pairing is 0.06 pct lower on a day-by-day basis at 1.2792.

There is no shortage of analysts that are willing to back sterling over its  Eurozone counterpart, indeed, this morning Trading Central note the technicals still favour the UK currency:

"Our preference: Short positions below 0.7825 with targets @ 0.7785 & 0.777 in extension."

Jyske Markets suggest the tide could be turning

Going against the euro-negative theme are Jyske Markets, the Danish investment bank.


They recommend investors back the euro over the pound based on the bet that a turnaround is due.

In a morning note to investors Jyske Markets say:

"We recommend investors to BUY EURGBP with a fairly close S/L at 77.94. GBP has strengthened by 14% over the past year. Since the turn of the year, GBP has strengthened by almost 8%.

"The daily chart and the technical indications show that the cross rate offers strong signals of an upcoming brief turnaround.

"There is strong divergence between price and RSI, which increases the
likelihood that the recent GBP strengthening has lost momentum."

Euro dollar is a Neutral

The euro-positive theme at Jyske also extends to the euro dollar exchange rate.

Where analysts, and indeed investor positioning, see further EURUSD losses Jyske Markets advise they are Neutral on this pair saying:

"The very short-term trend continues to signal ‘buy’ EURUSD. A breach above 124.10 will be significant for a movement up towards 125.30-126. On the other hand, trading below 121.60 will result in further pressure down towards 120."