Strategical support on EURGBP

8 Jan 2015

A little fundamental overlook might help to solve the puzzle here. Comparing the danger of deflation in EU to inflation in UK, comparing the 2.6% GDP growth in UK to 0.8% GDP growth in EU, comparing the 11.5% unemployment in EU to 6% unemployment in UK equals 3:0 for UK. Still there is the "grexit" talk that doesn't really help EU and ECB struggle to fight upcoming deflation by planning to introduce QE, that won't really help much - it equals even worse for EU. I think that in the long term we will see this level (0.775) broken. Even though we might see a 'little' correction up to 0.8 to gather more sellers and start the rally.