EUR GBP Bulls look like they re on the nice list this Christmas

With a complete data void and generally slow trading conditions, traders couldn’t be blamed for only keeping one eye on the markets today (perhaps with the other on some last second online shopping ahead of the holidays), but we’ve actually seen a bit of movement. Beyond the aforementioned drop to a fresh 11-year low in Brent crude oil, the euro also caught a bid today.

The widely-followed EUR/USD pair tacked on about 70 pips early in late European trade, but traders should also be monitoring EUR/GBP, which has hit a 2-month high of its own. Trading higher for the fifth out of the last six trading days, the European pair appears on track to close above the .7300 level.

As we’ve noted before, the unit has been trapped in a 500-pip sideways range from .6950 up to .7450 for essentially the entire year. After finding a floor at the bottom of the range in late November, bulls now appear well on their way to driving rates back to the top of the range in the mid-.7000s.

Along the way, the next hurdle will be the 78.6% Fibonacci retracement of the October-November drop at .7380, but assuming that barrier is eclipsed, EUR/GBP could close the year near the top of the range, setting the stage for a very interesting start to 2016.

In terms of fundamental events, the only reports to monitor this week will come from Britain, where traders will get their first glance at November’s public sector borrowing data (tomorrow at 9:30 GMT), followed by the final read on Q3’s current account and GDP figures (Wednesday at 9:30 GMT). Trading volume will inevitably slow down during the holiday season, but bulls definitely look like they’ll be on the “nice list” come Christmas Day.