Forex: EUR/GBP erases gains back to Friday’s close

FXstreet.com (Barcelona) - The EUR/GBP peaked at 0.8561 high in mid-London morning only to retrace it all back to Friday’s close of 0.8530. The FX market is hesitant and sideways on Monday despite news of an agreement between EU finance ministers, the Troika and Cyprus.

While officials work on details of the bailout, or “bail-in”, investors will be eyeing what happens in Italy as PD’s Bersani seems to be failing to form a government, the Five Star Movement loses some of their domestic support after voting for a PD candidate for President in the Senate, and Berlusconi’s PdL has reportedly been gaining in the polls were there to be early elections. “With the Easter shortened week, we would expect Bersani to announce his decisions by mid-week on forming a government, personally resigning, or capitulating to new elections, or else this may be delayed until next week”, wrote TD Securities analysts.

UBS analysts are bullish: “There is a strong support at 0.8445 - a closing break below this would be a bearish development. Resistance is at 0.8602 ahead of 0.8676”, wrote analyst Gareth Berry.