EUR/GBP holds weaker below 0.89 handle, over one-week lows
The EUR/GBP cross remained under intense selling pressure for the second consecutive session and dropped to over one-week lows in the past hour, albeit rebounded few pips thereafter.
The cross extended previous session's sharp reversal move from near one-month tops, beyond the key 0.90 psychological mark, as the British Pound continues to be underpinned by the latest Brexit headlines suggesting that the EU may offer the UK a two-year transition period.
• UK: Deal or No Deal… transition deal holds key to GBP sentiment in the near-term - ING
Meanwhile, the market seems to have digested the latest report, via Bloomberg, that ECB is considering cutting its bond purchase program to 30 billion Euros/month from January 2018. Hence, a subdued action around the shared currency, led by the ECB President Mario Draghi's overnight dovish comments, has failed to stall the pair's sharp slide on Friday.
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During a panel discussion about monetary policy, in Washington DC on Thursday, Draghi was noted saying that rates are expected to remain at present levels for an extended period of time and well past the horizon of net asset purchases. The dovish outlook was further reinforced by the ECB Governing Council member Ardo Hansson, saying that monetary policy has to remain accommodative.
In absence of any major market moving economic releases, either from the UK or Euro-zone, the GBP price dynamics might continue to act as an exclusive driver of the pair's momentum on the last trading day of the week.
Technical levels to watch
A follow through selling pressure below 0.8875 level is likely to accelerate the slide towards mid-0.8800s, below which the pair is likely to head towards 0.8815 support.
On the upside, any recovery attempts above the 0.8900 handle now seems to confront fresh supply near 0.8920 level, which if cleared could lift the cross back towards 0.8975 horizontal resistance ahead of the 0.90 handle.