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EUR/GBP: temporarily bid but headwinds persist

FXStreet (Guatemala) - EUR/GBP is currently trading at 0.7222 with a high of 0.7236 and a low of 0.7180.

EUR/GBP is back into the higher bracket of the bullish move from yesterday's ECB outcome after supply in Europe at the lofty levels in the euro before demand drove the price back up from aforementioned lows in the cross. Sterling is likely due some downside, but markets are allowing some recovery to and just about through the 20 DMA at 1.5142 here vs the broader bearish trend that emerged in the middle of August this year.

There has been some change of outlook in respect to timings of a BoE hike weighing on the pound into year end. Analysts at TD Securities noted the BoE on the 10th Dec next week and are looking for clues in respect of potential timings of a rate hike. Meanwhile, it seems as though the euro is going to be supported in a potentially quiet run up to the forthcoming FOMC. There will be some other key data events to keep Sterling desks alert though.

EUR/GBP levels

Karen Jones, chief analyst at Commerzbank explained that EUR/GBP has executed an exact 50% retracement of the move down from October this is located at 0.7238. "This feels and looks quite directional. Major resistance is not encountered until the 2013-2015 downtrend at 0.7470. We will maintain our longer term bearish view while capped here. Intraday dips are indicated to hold circa 0.7187/54."

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