EUR/GBP: eyes a break to 0.86 the figure on extended downside

EUR/GBP has slid down to test the 100 weekly SMA, losing the 0.87 handle. Currently, EUR/GBP is trading at 0.8661, down -0.71% on the day, having posted a daily high at 0.8730 and low at 0.8643.

EUR/GBP suffered on the EZ IP dropping by 0.8% mm in Feb compared to 0.1% expected, ("Jan data was revised to slightly “less worse ” (-0.6% M/M) than the preliminary data but the data still reflect a fairly sluggish start to the year for the Eurozone economy). For the UK, Davies came with some upbeat Brexit comments fueling the pounds bid forcing the cross to the lowest levels since June 2017.  

Brexit back in play

Davis said there was no precedent for the kind of customs deal the UK seeks with the EU (suggesting reaching a deal might not be that easy). "Davis also downplayed the notion of financial sector job losses following Brexit shortly before GS head Blankfein said his institution will concentrate more on Frankfurt and Paris. Davis’ comments appear to have helped lift the pound," as noted by analysts at Scotiabank.

EUR/GBP levels

EUR/GBP is headed towards 0.8600 on the extensions below recent support. The daily RSI hovers over bearish territory, moving deeper towards 30 and the cross remains underwater below a key rising support line on the daily sticks located a cent higher at 0.8820. However, the price action is turning bullish in the daily descent. However, a close below 0.8667 would open eyes towards the 78.6% retracement at 0.8527 (move up from the 2017 low). Bulls need to get above 0.8800.