The EUR/GBP was confined within a 30-pips narrow trading range on Friday and struggled for a firm direction, albeit remained closer to two-month peak touched earlier during the week.
Currently trading around 0.8720-25 region, the cross was seen consolidating yesterday's strong recovery back above 0.8700 handle led by renewed selling pressure around the British Pound in wake of persistent worries of a 'hard Brexit'. The cross, however, lacked follow through momentum amid some minor recovery momentum witnessed around the GBP/USD major.
Meanwhile, comments from BOE MPC member Saunders that weak sterling would lift inflation above the central bank's 2% target further supported some buying interest around the British Pound and collaborated to restricting further upside for the cross.
In absence of any major market moving economic releases, either from Euro-zone or UK, any fresh Brexit related news would remain a key determinant of the pair's movement on Friday.
Technical levels to watch
Immediate downside support is pegged near 0.8700 handle below which the cross is likely to drift back towards 0.8665 horizontal area ahead of 0.8650 support. On the upside, momentum above 0.8745-50 immediate resistance now seems to lift the cross beyond two-month high resistance near 0.8765 region towards its next major hurdle near 0.8795-0.8800 region.
- R3 0.8862
- R2 0.8806
- R1 0.8766
- PP 0.8711
- S1 0.8671
- S2 0.8615
- S3 0.8575
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