“¢ Easing GBP bearish pressure prompts some profit taking after Friday’s upsurge.
“¢ Corrective slide finds some support after better-than-expected German Ifo index.
“¢ Investors now eye ECB President Mario Draghi’s testimony for fresh impetus.
The EUR/GBP cross traded with a mild negative bias at the start of a new trading week and eroded a part of Friday’s strong upsurge.
The UK PM Theresa May’s comments on Friday, saying that the Brexit negotiation with the EU is “at an impasse” prompted some aggressive selling around the British Pound and helped the cross to rebound sharply from 100-day SMA support.
After Friday’s strong up-move of nearly 130-pips, to two-week tops, traders seemed inclined to take some profits off the table amid a modest pickup in the GBP demand, further supported by the UK Brexit Secretary Dominic Raab‘s optimistic comments that they remain confident of a deal.
The cross touched an intraday low level of 0.8955 but found some support following the release of better-than-expected German Ifo business climate index, coming in at 103.7 points for September as against the consensus estimates pointing to a downtick to 103.2.
The cross now seems to have stabilized around the 0.8965-70 region as market participants now look forward to the ECB President Mario Draghi’s testimony about the economy and monetary policy before the European Parliament Economic and Monetary Affairs Committee for fresh impetus.
Technical levels to watch
On a sustained weakness below mid-0.8900s, the corrective slide is likely to get extended towards 0.8930 intermediate support en-route the 0.8900 round figure mark. On the flip side, any meaningful up-move might continue to confront resistance near the 0.90 handle, which if cleared is likely to accelerate the momentum towards 0.9025-30 supply zone.
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