EUR/GBP supported on key 20 DMA

By FXStreet FXStreet (Guatemala) – EUR/GBP has been attempting the 200 DMA but has failed to make a clear break with sustained closes and risks are mounting towards the downside while trading below August highs of 0.7420.

The euro has been supported on the unwinding of the carry since Black Monday, but continued failures on the upside are taking their toll. The 20 DMA at 0.7281 today is offering an ascending line of support for the meantime but fundamentals in respect to the divergence between the ECB and BoE may come back into play, of which focus may be spurred on by this week’s FOMC and subsequent Fed decision in the 17th. If the Fed hike rates, then the disparity between the ECB and BoE may be symbolized.

EUR/GBP technical bid

Technically, however, Karen Jones, chief analyst at Commerzbank explained that they look for dips lower to be contained by the uptrend at 0.7194 and while it holds, an upside bias will remain intact. “The market has recently failed at the top of a 6 month channel (0.7408) and will need to clear the 0.7421 recent high to retarget the 0.7482 May high ahead of the 0.7469 55 week ma.”
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Source:: FX Street