EUR/GBP retakes 0.88 handle

Sterling was offered again in Asia, pushing the EUR/GBP cross back above 0.88 handle although the momentum is weak due to overbought technical conditions.

Rejected at 0.8843

The cross fell from the five-year high of 0.8843 to a low of 0.8776 as Cable witnessed a minor bout of technical recovery, which apparently ran out of steam near the hourly 50-MA hurdle.

Consequently, the cross regained bid tone and clocked a session high of 0.8810. The data docket is thin in UK; hence the focus is on the ECB monetary policy accounts. Traders would want to see if the policymakers are indeed considering a QE Taper.

EUR/GBP Technical Levels

The cross was last seen trading just above 0.88 handle. Failure to hold above the same could yield a test of 0.8785 (Asian session low). A violation there would expose 0.8725 (Aug 16 high). On the other hand, break above 0.8811 (Tuesday’s high) would expose resistance at 0.8843 (yesterday’s high), above which a major hurdle is seen directly at 0.8941 (Oct 2010 high).