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GBP Strength Keeps Pressure on EUR/GBP

EURGBP
MNI (London)
  • Wednesday's break of support at Gbp0.8880 saw a quick drop through what was expected to be stronger support between Gbp0.8866/61 before it based around the base of its 1.0% 10-dma envelope at Gbp0.8838.
  • The 1.0% envelope parameters though are not seen as support/resistance levels but it has been noted that the cross does not like to be outside for too long.
  • Rate recovered to Gbp0.8882 as GBP pared back gains ahead of the 1600GMT fix then settled around Gbp0.8865.
  • Asia consolidated Wednesday's move between Gbp0.8860/70 before GBP came under fresh demand interest into Europe which pressed rate down to Gbp0.8852.
  • Support remains around the Gbp0.8840 level, a break to again expose the base of the envelope, which by time currently comes through at Gbp0.8821. Resistance now seen above Gbp0.8880.
  • Whilst rate holds below its 10-dma (current Gbp0.8910) seen retaining an underlying bearish feel.
  • ECB MonPol 1245GMT/Lagarde press conference 1330GMT in focus
  • MNI Techs: EURGBP traded lower yesterday and cleared the key support between 0.8867 and 0.8861. These mark the Nov 23 and Nov 11 lows and the breach represents a significant technical breakout. The break lower reinforces underlying bearish conditions and paves the way for a move towards 0.8800 and 0.8784. On the upside, a key short-term resistance has been defined at 0.8925 where a break is required to ease the bearish pressure. Heavy!
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets
MNI London Bureau | +44 203-586-2231 | john.webb@marketnews.com
BulletMarketsForeign Exchange Bullets

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