EUR/GBP: Sell level adjusted lower, with the appropriate changes made to the objectives and stop.
EUR/GBP has found initial support after bouncing from daily channel support near the 0.8300 region. Scope is seen for a minor continuation of the recovery higher. However, hourly structure remains bearish with a lower high sought versus 0.8613 for a fresh swing to re-test 0.8303.
If a sustained break under 0.8303 can be realized then an extension back to the 0.8068 – 0.8142 region would become viable. This view is assisted by the recent push under 1.3146 in EUR/USD, which may act to make EUR cross shorts easier to maintain.
Rising yields in the core Euro-Zone sovereign bond markets is a continued concern and one that may destabilise the FX markets going forward. Within this environment Sterling may well be judged the best of a bad bunch and to a degree be seen as a short-term safe haven, further adding to the potential for downside pressure ahead.
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