EUR/GBP appears supported near 0.8720 amidst GBP rally

The cross found dip-buyers near 0.8720.
UK’s PMI disappointed expectations.
GBP upside momentum picks up pace.

Pablo Piovano FXStreet

The rally in the Sterling is weighing on EUR/GBP today, which dropped to fresh daily lows in the 0.8720 region, where it seems to have found some decent support.

EUR/GBP met dip-buyers around 0.8720

The European cross is down for the third straight session so far on Thursday, always on the back of a persistent buying bias surrounding the British Pound and an erratic course of the shared currency.

Earlier in the session, UK’s manufacturing PMI dropped to 55.3 for the month of January, missing initial estimates at the same time. Previously, on Wednesday, EMU’s flash inflation figures for the last month matched consensus.

Looking ahead, the broader risk trends in the global markets appears to be the main driver of the price action for both GBP and EUR as well as the ongoing negotiations around Brexit.

EUR/GBP key levels

The cross is now losing 0.06% at 0.8742 and a breach of 0.8717 (low Feb.1) would open the door to 0.8687 (low Jan.25) and finally 0.8646 (low Jun.8). On the upside, the next up barrier is located at 0.8767 (10-day sma) followed by 0.8813 (21-day sma) seconded by 0.8834 (high Jan.30).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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