“¢ Brexit uncertainties/fading BoE rate hike prospects continue to weigh on GBP.
“¢ The post-ECB recovery in the shared currency provides an additional boost.
Having posted a session low level of 0.8726, the EUR/GBP cross caught some fresh bids and turned higher for the second consecutive session.
The British Pound continues to be weighed down by reemerging Brexit worries and diminishing prospects for an eventual BoE rate hike move in the near future.
Adding to this, the bearish pressure surrounding the shared currency now seems to have eased, at least for the time being and was further seen contributing the pair’s ongoing recovery move.
The latest leg of uptick could also be attributed to some fresh technical buying on a sustained move back above 50-day SMA, helping the cross to reverse nearly 50% of its post-ECB downfall.
In absence of any major market moving economic releases, either from the UK or EZ, a follow-through momentum, possibly towards 100-day SMA barrier, now looks a distinct possibility.
Moving ahead, investors’ focus this week will remain on the latest BoE monetary policy decision, due to be announced on Thursday, which along with any fresh Brexit update might play a key role in determining the pair’s next leg of directional move.
Technical levels to watch
Any subsequent up-move is likely to confront resistance near the 0.8785 region (100-DMA), above which the cross is likely to move past the 0.8800 handle and aim towards retesting the very important 200-day SMA hurdle near the 0.8825 region.
On the flip side, 0.8740 level now becomes an immediate support to defend, which if broken might turn the cross vulnerable to extend the downfall further towards testing an important horizontal support near the 0.8700 handle.
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