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Forex: EUR/GBP bounces to mid-February low at 0.8575

FXstreet.com (Barcelona) - The Euro took a ~120-pip hit against the British Pound right as FX trading started this week, with the price going as low as 0.8531. Tested that zone for support, the EUR/GBP is now drawing a bounce above 0.8560.

Behind the move is the Cyprus bailout that is expected to be partly funded by bank deposits (9.9% for deposits over €100k and 6.75% for deposits less than 100k, raising €5.8b). The Cypriot Parliament will go to a vote today.

Ahead is EMU trade balance at 10:00 GMT, but investors eyes' are on Cyprus and officials' comments regarding the news.

“EUR/GBP is swiftly tumbling towards the 55 day moving average at 0.8508 Together with the 0.8448 February low it should offer support in the course of this week, however”, wrote Commerzbank analyst Karen Jones, pointing to immediate resistance at the mid-February low at 0.8575 and Friday’s 0.8603 trough.

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