EUR/GBP puts the 0.86 handle to the test

EUR/GBP remains under pressure near 0.8600.
EUR, GBP remains on the defensive.
Dovish BoE still weighs on the Sterling.

Pablo Piovano FXStreet

The selling bias around the British pound and the single currency remains well and sound at the end of the week and motivates EUR/GBP to extend further the rangebound theme in the 0.8600 region.

EUR/GBP weaker on EUR, GBP selling

The broad-based rally in the greenback has been putting both the quid and the euro under renewed downside pressure throughout this week, prompting the European cross to stick to the sideline bias.

In the meantime, the Sterling continues to trade on the defensive in response to the, in general, dovish tone from the BoE at its event on Thursday. It is worth recalling that MPCs voted 7-2 in favour of keeping rates on hold at 0.75%, with Saunders and Haskel leaning towards a 25 bps rate cut.

No news from the run up to the UK general elections next month, with latest polls showing the Conservative Party is still leading the vote intentions ahead of the key debate between J.Corbyn and B.Johnson on December 6.

In the docket, German trade surplus came in above estimates in September, with auspicious results from both exports and imports.

EUR/GBP key levels

The cross is losing 0.05% at 0.8612 and a breach of 0.8574 (monthly low Oct.17) would expose 0.8488 (monthly low May 6) and then 0.8474 (2019 low Mar.12). On the other hand, the next hurdle aligns at 0.8676 (high Oct.24) followed by 0.8808 (200-day SMA) and finally 0.8906 (50% Fibo of the May-August rally).

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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