EUR/GBP falls to its lowest levels since 16 July
And price now looks to threaten a break of the 200-day MA (blue line). If sellers are able to hold a daily close below that, then bias and momentum in the pair turns more bearish moving forward.
However, just below there is support from the 50.0 retracement of the big picture move higher at 0.8810 and bids supporting at 0.8800. That will be a key level to eye as well in the session ahead.
The euro has been weighed down recently by Italy’s political woes while the pound has been holding resilient and finding bounces on recent Brexit rhetoric. And today is one example of the latter as a simple Brexit headline with little details has proven to be enough for pound buyers to jump in.
As with all pound pairs, Brexit rhetoric is going to be the number one factor and so far the quid has been holding up rather well as we await negotiations between the UK and EU to take place with regards to the latest proposals to solve the Irish backstop/border.
There is still hints of optimism around that and for now, that is helping to underpin the pound today. As for EUR/GBP, if 0.8800 gives way then watch out for a test of the swing region support near 0.8720 next.