EUR/GBP has faded the overnight spike to the 0.8640 area on Monday, now returning to the 0.8600 neighbourhood in response to increased EUR weakness.
EUR/GBP upside capped in the mid-0.8600s
Last week’s sell off in the British Pound has allowed the European cross to regain the 0.8600 handle and above, although the up move lacked of follow through, sparking the ongoing correction.
In addition, EUR-sellers stay quite active at the beginning of the week, as the bid tone around the greenback remains on the rise ahead of the opening bell in Wall St.
Data wise in Euroland, Investor Confidence gauged by the Sentix index has eased a tad to 17.4 for the current month, down from January’s 18.2, ahead of the speech by ECB’s M.Draghi. Across the Channel, Carney’s speech on Thursday and UK’s Industrial/Manufacturing Production on Friday will be the salient events.
EUR/GBP key levels
The cross is now losing 0.40% at 0.8607 and a break below 0.8570 (low Feb.3) would aim for 0.8530 (55-day sma) and finally 0.8488 (low Feb.1). On the other hand, the next hurdle aligns at 0.8646 (high Feb.3) ahead of 0.8657 (100-day sma) and then 0.8733 (4-month resistance line).
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