EUR/GBP seen at 0.9500 in 6-month – Danske Bank

Chief Analyst at Danske Bank Arne Rasmusse expects GBP to depreciate towards the 0.9500 handle in the medium term.

Key Quotes

“EUR/USD has come off its high and is now consolidating. Technically, the 1.1350-1.1450 range proved an important resistance area and EUR/USD is likely to trade in a narrow range ahead of the Jackson Hole conference at the end of the week”.

“EUR/GBP inched lower yesterday, close to the low levels set after the strong UK retail report last week”.

“As such, we think the cross is taking a breather as stretched short-term technical (RSI) and valuations call for a consolidation. Moreover, the past week’s support for the USD following hawkish Fed comments has also supported downside in EUR/GBP”.

“We expect the sell-off in GBP to resume and target EUR/GBP at 0.95 in 6M. Investors looking to sell GBP should look for opportunities below 0.86 to buy EUR/GBP”.