EUR/GBP: 200 day ma at 0.8879 to cap?

• EUR/GBP: consolidating at psychological 0.88 the figure, where next?
• EUR/GBP: rallies look set to extend to the 200 day ma at 0.8879.

EUR/GBP has been consolidating around 0.88 the figure. Currently, EUR/GBP is trading at 0.8797, down -0.13% on the day, having posted a daily high at 0.8834 and low at 0.8783.

There was a slide from the highs in early European trade while cable extended north from 1.3581 to eye 1.3667 on the UK construction PMI beat, (52.5 vs 50.5 consensus). This was a relief to bulls considering it was the first UK economic data beat for over a fortnight. However, services data is the one to watch that arrives on Thursday. 

Eyes on Brexit and data

Later on, there was an offer on cable spurred by the Brexit-related BBC report with threats of a hard Brexit over the customs.border issues. For the euro leg of the cross, the EZ GDP arrived in-line at 2.5% from 2.8%, being the strongest rate in 10 years and the Eurozone unemployment was seen unchanged at 8.5%. This was supporting the euro until US traders came online bidding up the dollar.

EUR/GBP levels

Analysts at Commerzbank explained that EUR/GBP has managed to regain the 55 day ma with intraday Elliott wave counts looking positive and argued that rallies look set to extend to the 200 day ma at 0.8879. "What is not clear at this juncture," they say, " is whether or not the market has enough impetus to rally above its 200 day ma. While capped here we will continue to target 0.8526, the 78.6% retracement of the move from 2017. En route is a support line at 0.8577."