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EUR/GBP testing 0.7900

FXStreet (Edinburgh) - EUR/GBP is now putting the critical 0.7900 support to the test on Tuesday, dropping from intraday highs above 0.7940.

EUR/GBP weaker on ECB chatter

The abrupt drop in the cross is following market chatter pointing to the ECB and its intentions to buy covered bonds within its asset purchase programme, hurting the common currency. The cross quickly reacted with a dip to multi-day troughs around 0.7900 the figure, extending the correction lower from October tops near 0.8030. In the opinion of Karen Jones, Head of FICC Technical Analysis at Commerzbank, “Interim support lies at .7900/10 but the market will need to drop below the .7900/10 support line to alleviate upside pressure”.

EUR/GBP levels to watch

As of writing, the cross is losing 0.15% at 0.7905 with the immediate support at 0.7874 (61.8% of 0.7766-0.8046) followed by 0.7851 (low Oct.10) and then 0.7791 (low Oct.2). On the flip side, a breakout of 0.7948 (100-d MA) would target 0.7981 (high Oct.17) en route to0.8027 (high Oct.16).

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