Wednesday, July 20, 2011

JPMorgan: EUR/GBP is trapped in the narrow range

Analysts at JPMorgan believe that EUR/GBP is trapped at the current levels as in the short term both the euro zone and the UK faces serious risks that are affecting their currencies.

While in Europe the main threat comes from the debt crisis, Britain is in danger of economic recession.

The specialists expect euro to remain in a very tight trading range versus its British counterpart during the coming months between 0.8550 and 0.9100.

In their view, the trade’s volatility has heightened due to the unexpected crisis of confidence to Italy seen so far and the pat situation in America where the policymakers are trying to reach compromise on the debt ceiling.

According to the bank, when the pair EUR/GBP finally comes out of this range it will break it on the upside.

daily eurgbp 16-29

Chart, Daily EUR/GBP

published by FBS Holdings © 2011