EUR/GBP risks further downside – Commerzbank

The European cross remains poised for further retracements, although it may not be ready to break lower just yet, suggested Karen Jones, Head of FICC Technical Analysis at Commerzbank.

Key Quotes

“EUR/GBP has eroded the 200 day ma at .8797. This guards a major support band, namely the September low at .8746/33 and the 55 week ma at .8730. Risks are on the downside, but we suspect that the market is not yet ready to break lower. Below .8730 would target the .8530/78.6% retracement of the move seen this year”.

“Near term rallies should find decent resistance at .8840/80 (38.2% and 50% retracements of last leg down”.

“Key near term resistance is the .9034 12th October 2017 high. This guards the .8838 August high”.