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Below 10-dma Keeps Outlook Bearish

EURGBP
MNI (London)
  • Reflects general sterling strength as weekend reports heightens Brexit trade deal hopes as rate extended its recent corrective pullback to Gbp0.8909 in Asia.
  • Move sees rate ease further away from its key technical 10-dma (current Gbp0.8943) which keeps the near term outlook bearish.
  • Support seen into Gbp0.8900/0.8895, a break to expose the Nov11 low at Gbp0.8861, the base of the 1.0% 10-dma envelope easing to Gbp0.8853.
  • Focus this morning on EZ and UK flash PMI's.
  • BOE MPC members at the TSC.
  • Brexit headlines remain key for sterling strength.
  • MNI Techs: EURGBP is trading lower and has breached last week's low of 0.8915. The cross rallied sharply Nov 12, extending the recovery from the Nov 11 low of 0.8861. Although this move displays some reversal features, it is likely a correction. A break of trendline resistance at 0.9021, drawn off the Sep 11 high is required to signal a reversal. Key support has been defined at 0.8861, Nov 11 low. Clearance of this level resumes the current downtrend.
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com

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