EUR/GBP: where next with price testing below key support?

• EUR/GBP a choppy way out of consolidation?
• EUR/GBP to break below key support with convincing closes?

EUR/GBP has been a choppy performance to the downside as the phase of consolidation breaks down after EUR/GBP fell from above the 0.89 handle earlier this week. Currently, EUR/GBP is trading at 0.8809, down -0.06% on the day, having posted a daily high at 0.8840 and low at 0.8802.

What to watch for?

EUR/GBP is testing the swing low area between 0.8800/10 but has found itself below a technical support while fundamental support for sterling comes in the expectations in the BoE ahead of the ECB next week. However, heads will turn to the UK's retail sales data as the first major catalyst.  Meanwhile, for today, markets are on high alert with respect to a possible tug of war at Washington over a possibility of a government shutdown. 

EUR/GBP levels

Analysts at Commerzbank noted that EUR/GBP has recently failed to clear an old Fibonacci retracement at 0.8925 but are not completely convinced on the downside yet.

"Currently, we remain unable to rule out a move to the 0.9034 October high. Below 0.8808 would retarget the 0.8697 recent low. Key near-term resistance is the 0.9034 October 12 2017 high. This remains the barrier to the 0.9071/0.9175 61.8% and 78.6% Fibonacci retracements," the analysts at explained.