EUR/GBP: 55 pips lower, back off the highs as sterling rebounds back to 1.2200

Ross J Burland FXStreet

Currently, EUR/GBP is trading at 0.8933, up 0.46% on the day, having posted a daily high at 0.8984 and low at 0.8889.

EUR/GBP is a strong bid today with weakness in the pound pressing to fresh lows besides the 'flash crash that some EBS services reported as low as on the 1.11 handle against the greenback. For today, that low is 1.2082 so far.

Initially, the move lower in the pound was driven by the demand for the USD after US house prices measured by the S&P/Case-Shiller index expanded at an annualized 5.1% during September, beating the initial forecasts.

Meanwhile, for the cross, we have been listening to both BoE Carney who testified at the House of Lords in respect to Brexit, as well as Mario Draghi who was speaking in Berlin. Markets were looking for a dovish announcement from Carney given the prior drop in the pound, however instead we got more clues on the BoE's outlook for the Fed than its own monetary policy. Meanwhie, Draghi says that Monetay policy isn't creating sovereign spending moral hazard, so that's alright then, adding, "We will exit our policies when we've hit inflation targets," and the EUR/USD consolidates at highs.

BoE's Carney: Market sees greater chance that Fed will hike rates

EUR/GBP levels

Current price is 0.8933, with resistance ahead at 0.8934 (Weekly High), 0.8946 (Weekly Classic PP), 0.8947 (Daily Classic R2), 0.8961 (Hourly 200 SMA) and 0.8965 (Daily Classic R3). Next support to the downside can be found at 0.8930 (Yesterday's High), 0.8920 (Daily Classic R1), 0.8916 (Hourly 100 SMA), 0.8915 (Hourly 20 EMA) and 0.8902 (Daily Classic PP).

Author

Ross J Burland

FXStreet

Ross J Burland, born in England, UK, is a sportsman at heart. He played Rugby and Judo for his county, Kent and the South East of England Rugby team.

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