Monthly – Triangle formation. Trend of lower highs at 0.9022
Daily - 261.8% and a 13
Intraday (four-hour) – Expanding has a bias to break lower
We look to sell EURGBP at 0.9000
Euro-zone retail sales declined 0.3% for May compared with consensus expectations of a small increase with the year-on-year increase at 1.3% from 1.8% previously which suggested subdued consumer demand.
ECB Council Member Rehn stated that the slowdown in no longer temporary. Further monetary stimulus is now needed until there is an improvement in economic conditions and prospects if the is to meet its mandate. Rehn is not one of the most dovish members on the committee and the comments reinforced expectations that the would take further action to cut interest rates by September at the latest.
Sterling continued to be hampered by concerns over the growth outlook following the weak PMI data releases the week. There was also further speculation that the Bank of England would adopt a more dovish policy stance over the next few months. In relative global terms, however, the stance is likely to be slightly restrictive, especially with expectations that the and ECB will cut interest rates during the third quarter. Sterling will also gain some support if there are increased hopes that global actions support the global growth outlook.