EUR/GBP: correction in place, watching potential to back above 0.8852/68

Currently, EUR/GBP is trading at 0.8799, down -0.55% on the day, having posted a daily high at 0.8883 and low at 0.8772.

Further GBP/USD upside unlikely - ING

EUR/GBP is testing a key resistance area here in a minor correction of the Carney induced sell off from aforementioned highs. Also, European stocks ended the session little changed, erasing an earlier drop after comments by Eurosystem officials damped speculation Mario Draghi had turned more hawkish, supporting the downside."Officials said the European Central Bank president’s speech on Tuesday was intended to strike a balance between recognizing the currency bloc’s economic strength and warning that monetary support is still needed,' explained Oliver Renick in New York's Bloomberg offices.

In respect of sterling, much from here depends on economic data and rates. However, given the weak consumer spending environment, uncertainty about investment intentions and declines in confidence now that Brexit discussions are underway if they do choose to raise rates in August, well, it doesn't mean they are embarking on a series of hikes, as argued by James Knightley, Senior Economist at ING.

EUR/GBP levels

EUR/GBP dropped below the 0.8852/68 January highs but while still above 0.8789 near-term uptrends, the cross remains with a bullish bias according to analysts at Commerzbank: EUR/GBP is neutral to positive: EUR/GBP will need to close above the 0.8852/68 January high to confirm further upside potential to 0.8987/.9059, the 61.8% retracement and the highs from mid-October. It is immediately bid above the 0.8789 near-term uptrend." A drop below 0.8789 and daily closes open 0.8720, 0.8700 and 0.8640.