EUR/GBP clocks 4-1/2 month low on Italian Referendum
|EUR/GBP cross dropped to 0.8310; the lowest since July 22 as the ‘no vote’ win in the Italian referendum put the Eurozone stability at risk.
Eyes German bond yields
The German bond yields declined over the last month despite the global bond market sell-off. This suggests the bond markets in Germany priced-in a ‘no vote’ win in advance.
Consequently, the common currency could gain ground in Europe if the German yields ‘rally on fact”.
Meanwhile the focus would also be on the UK service PMI for November. (exp 54.2, previous 54.5).
EUR/GBP Technical Levels
The pair was last seen trading around 0.8330 levels. A break below 0.83 (zero figure) would open doors for a test of 200-DMA support of 0.8278. A violation there could yield a drop to 0.8248 (July 14 low). On the other hand, a breach of hurdle at 0.8334 (Sep 6 low) would open doors for 0.8405 (session high) and 0.8431 (5-DMA).
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