EUR/GBP: Italian referendum and EU politics weighs

Currently, EUR/GBP is trading at 0.8499, down -0.51% on the day, having posted a daily high at 0.8563 and low at 0.8467.

EUR/GBP has been moving higher in a recovery of the 0.8557 downside at the start of the week. Sterling has caught a bid of late and has been relatively resilient to the strength in the greenback as focus now turns to the EU with the UK economy robust in light of the recent referendum to leave the EU. European politics is the key focus, starting with the Italian referendum taking place this weekend that analyst at Brown Brothers Harriman said may see the populist-nationalist forces do well.

"The defeat of the Italian constitutional reform, if it comes, will be not solely at the hands of the populist-nationalist forces. Even some of Renzi's PD party is opposed to the constitutional changes, as is former PM Monti, who is hardly a part of the populism-nationalism in Italy. Still, a defeat of the referendum in Italy may give the euro-skeptical 5-Star Movement a fillip after winning local elections in Rome and Turin earlier this year. "

EUR/GBP levels

Current price is 0.8500, with resistance ahead at 0.8506 (Daily Classic S1), 0.8508 (Hourly 100 SMA), 0.8515 (Hourly 20 EMA), 0.8533 (Weekly Classic PP) and 0.8534 (Hourly 200 SMA). Next support to the downside can be found at 0.8498 (Yesterday's Low), 0.8478 (Monthly Low), 0.8478 (Weekly Low), 0.8467 (Daily Low) and 0.8467 (Daily Classic S2).