Article by AlgosysFx Forex Trading Solutions
The Euro continued its incline versus the Great British pound in the previous European trading exchanges as markets remain hopeful that the European Central Bank would take the necessary action to tackle the debt crisis at its policy meeting this coming September 6. As traders still hold on to hopes of an ECB intervention in the bond markets, the single currency is expected to rise versus the Pound in today’s European exchanges.
As the central bank policy makers near their key meeting this week to announce measures to defend the shared currency, so are the European officials in the persons of the four most powerful leaders in the Euro Zone. German Chancellor Angela Merkel, French President Francois Hollande, Italian Prime Minister Mario Monti and Spanish Prime Minister Mariano Rajoy are having their own meetings, and all have seemingly shown support for a more active participation of the central bank in the fight against the debt crisis; although talks have not gone smoothly as others anticipated because of the leaders’ contrasting opinions. But others remain positive that the European officials are brewing an agreement to effectively deal with the debt crisis.
Even though the European Union’s outlook was cut by Moody’s Investors Service, the shared currency is expected to find support from expectations that the ECB would resume its bond buying. According to Jean-Paul Gauzes, member of the European Parliament, ECB President Mario Draghi said that he would be comfortable buying debt with maturities of up to about three years, as reported in Bloomberg News. On speculations that Draghi’s plan would work in order that confidence would be supplied to the beleaguered Euro area, the EURGBP is likely to go higher. Thus, a long position is recommended in today’s European trading session.
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