EUR/GBP: bears attacking key support zone

EUR/GBP 0.88 to break?
Key UK data coming up this week.

Ross J Burland FXStreet

EUR/GBP is heading back south towards the recent lows within a move that commenced from a cluster of hourly MAs at 0.8860. Currently, EUR/GBP is trading at 0.8823, down -0.44% on the day, having posted a daily high at 0.8872 and low at 0.8808.

From data for the euro, there was a positive tone in Germany's business sector. We had Germany’s ZEW survey that showed investor sentiment was falling in February in the wake of the recent market volatility. The data gives the impressions that the economy retains solidly positive momentum.

All eyes look ahead to this week's UK jobs data

UK: Wage growth data eyed for BoE’s May rate hike prospects - ING

For the UK, however, the manufacturing orders data from the CBI were weaker than the consensus, but it this week’s jobs and wage numbers that will likely determine the pounds near-term trajectory given that the data will be keenly eyed by the BoE. Of course, we are keeping a close ear to the ground for Brexit developments as well.

EUR/GBP levels

Analysts at Commerzbank explained how EUR/GBP continues to slowly ease back and noted how the market last week reversed just ahead of the 0.8926 mid-January high and the top of the channel at 0.8957:

"Initial support lies circa 0.8800. Key nearby support is offered by the December and January lows at 0..8689/87. While these hold we remain unable to rule out recovery to the 0.9034 October 2017 high. This remains the barrier to the 0.9071/0.9175 61.8% and 78.6% Fibonacci retracements."

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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