EUR/GBP bulls capped again, lower highs 0.8889

Currently, EUR/GBP is trading at 0.8871, up 0.17% on the day, having posted a daily high at 0.8902 and low at 0.8843.

GBP/USD headed back to 1.3350? - Scotiabank

On the back of both euro strength and post a less hawkish Carney yesterday, along with UK politics weighing on sentiment amid speculation about fall out between PM May and Foreign Minister Johnson over Brexit underpinning the view of PM’s weak leadership position, EUR/GBP rose to just a few pips below 0.89 the figure before offers capped the cross in early European trade, (0.8900 is the 23.6% Fibo of 0.9307 (Aug 29th high) to 0.8775 (last Friday's 8-week low)). 

EUR/GBP was pressured back to 0.8850 area, mid-London, after the US session consolidated the cross until a mid-morning spike to 0.8889 where offers capped again. Eurozone July current account SA arrived as EUR 25.1bln vs 22.8bln previous and Eurozone July construction output mm was 0.2% matching the previous. Germany's September ZEW current situation arrived at 87.9 vs 86.2 exp. 

We have the German elections coming up this Sunday, where Merkel goes for a 4th term after a twelve-year leadership, there was no price action in the euro by the latest election poll from Forsa that sees Merkel & Co now down to 36% ( -1% on the week) and placing the SPD unchanged at 23%. 

EUR/GBP levels

EUR/GBP recently sold off sharply and continues to target the 0.8743 14th July low, noted analysts at Commerzbank:

"Between here and 0.8698 we have a LOT of support namely the 55-week ma, the 200-day ma and the 2015-2017 uptrend. We would continue to cover our short positions and at the very least tighten up stops. Intraday rallies are indicated to hold below 8875/.8935," the analysts at Commerzbank explained.