EUR/GBP flirting with lows, around 0.8840 level
• Positive Brexit news exerting pressure for the third straight session.
• Weakness below 0.8840 level to confirm a near-term bearish break.
• German CPI and BoE Carney’s speech to provide fresh impetus.
The British Pound continued gaining traction on Wednesday and has now dragged the EUR/GBP cross to its immediate support near the 0.8840 region.
The cross extended overnight sharp retracement from 1-1/2 week high level of 0.8982 and traded with a bearish bias for the third consecutive session amid some positive development over the so-called Brexit-divorce bill.
On Tuesday, the Telegraph and the Financial Times reported a breakthrough in the Brexit deadlock and remained supportive of the strong bid tone surrounding the British Pound.
Meanwhile, a renewed buying interest in the EUR/USD major might now help limit deeper losses, at least for the time being. Today's release of the prelim German inflation figures would influence sentiment surrounding the shared currency and provide some fresh impetus.
Later during the day, the BOE Governor Mark Carney's scheduled speech at the Fixed Income Currencies and Commodities Markets Standards Board, in London, would also be looked upon for short-term trading opportunities.
Technical levels to watch
A follow-through weakness below 0.8840 level is likely to accelerate the slide towards the very important 200-day SMA support near the 0.8800-0.8795 region. On the upside, 0.8865 level now seems to act as an immediate resistance, above which the cross is likely to aim towards reclaiming the 0.8900 handle.