EUR/GBP a fade on the minor recovery, target 55-W MA?
- EUR/GBP recovers just aheda of a major support area.
- EUR/GBP bearish bias persists.
EUR/GBP has been in recovery from below the 0.88 handle after a steep decline from the 0.8980's commencing at the start of this week on the back of improved sentiment with respect to Brexit noise, (Reports suggest that UK/EU negotiators may be close to a deal on the Irish border issue). Currently, EUR/GBP is trading at 0.8814, down -0.27% on the day, having posted a daily high at 0.8842 and low at 0.8777.
Additionally to the pounds favour, UK house prices rose 0.1% m/m this month, according to the “Nationwide” survey. The gain was in line with expectations and reflected a broader moderation in house price growth in y/y terms (+2.5%). However, the bid in the euro vs the greenback has more legs than cable, allowing the cross to correct in a minor way in early NY today.
GBP remains fragile – Danske Bank
What's happening with the dollar today?
In respect to the US dollar, The New York Times mentioned that the White House is planning to replace Secretary of State Tillerson with CIA Chief Pompeo and that was damaging. Earlier, the US personal income and spending report showed that the PCE price index was in line with expectations.
EUR/GBP bears failed just ahead of a major support band, namely the September low at 0.8746 and the 55 week ma at 0.8728 where a progression to the downside below 0.8728 would target the 0.8530/78.6% retracement of the move seen this year, according to analysts at Scotiabank. "Near-term rallies should find decent resistance at 0.8840/80 (38.2% and 50% retracements of last leg down. Key near-term resistance is the 0.9034 12th October 2017 high. Currently, the market is effectively sidelined, but looks set to sell off to the bottom of the range again," the analysts added.