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   “¢   Remerging Brexit concerns prompt some fresh GBP weakness on Monday.
   “¢   Italian politics kept EUR bulls on the defensive and seemed to cap gains.
   “¢   This week’s important UK/EZ releases to provide a fresh directional impetus.

The EUR/GBP cross maintained its strong bid tone through the mid-European session, albeit has retreated around 15-pips from session tops.  

The cross built on Friday’s recovery move from 3-week lows and continued gaining positive traction for the second consecutive session on Monday amid some renewed GBP weakness. Against the backdrop of recent BoE dovish tilt, reemerging Brexit concerns, this time talks of a second Scottish referendum, exerted some fresh selling around the British Pound.

However, the latest Italian political development, wherein the country’s two largest populist party’s agreed on a coalition program, kept the EUR bulls on the back-foot and might contribute towards capping any additional gains, at least for the time being.

Moving ahead, investors this week will confront important macroeconomic releases from the UK and the Euro-zone. This along with the BoE’s inflation report hearings and the ECB monetary policy meeting minutes should help determine the pair’s next leg of directional move.  

Technical levels to watch

Immediate resistance is pegged near the 0.8785-90 region, above which the cross is likely to aim back towards retesting the 0.8835-40 supply zone. On the flip side, 0.8745 level now seems to protect the immediate downside, which if broken might prompt some fresh weakness and drag the cross back towards 0.8725 intermediate support en-route the 0.8700 round figure mark.