EUR/GBP: bulls keep upside in play above key 0.7736

EUR/GBP is currently tailing back of the recent highs made at 0.7904 with lows today so far of 0.7747 in a volatile window as we head towards the EU referendum date of 23rd June. 

Sterling is driven on the polls and continues to dominate the headlines and was causing quite a stir overnight in Asia in thin markets where huge volatility was keeping the desks alert and busy. That settled back down in European and US shifts and the price in EUR/GBP has consolidated. 

Data wise we were scarce, although as noted by Valeria Bednarik, we had a review of the Eurozone Q1 GDP confirmed that the region grew 0.6% during the first three months of the year, "Whilst the most relevant piece of news coming from the US was the  IBD/TIPP Economic Optimism Index that dropped 0.5 points, or 1.0%, in June, posting a reading of 48.2 against  48.7 in May and expectations of 49.1."

In respect to the UK, we await manufacturing and industrial production figures for April as next scheduled catalyst. 

EUR/GBP levels

Analysts at Commerzbank noted that EUR/GBP has seen rejection at tough resistance at 0.7905 (61.8% retracement) and 0.7945 the high from the beginning of May. 

"We note the 13 count on the 240 minute chart and while this suggests initial failure, the market will need to go sub 0.7736 (26th April low) to alleviate upside pressure. Nearby support lies at 0.7736 (26th April low) and 0.7654 (March low) and these guard the key supports, which are the 50% retracement of the move from November 2015 at 0.7550 and the 200 day ma at 0.7538."

EUR/GBP forecasts: