EUR/GBP scope for a rebound to 0.8682 – Commerzbank

In view of Karen Jones, Head of FICC Technical Analysis at Commerzbank, the door remains open for the European cross to retest the 0.8680 area.

Key Quotes

“EUR/GBP remains on the defensive and the focus is on last week’s low at .8460. This low was accompanied by a divergence of the daily RSI, which suggests that we are likely to see a near term corrective rebound towards the 23.6% retracement at 0.8682. Below .8460 lies the .8337 September low and the 200 day ma at 0.8270”.

“We suspect that the rally will struggle to regain the 55 day ma at 0.8760 and while capped here will remain offered”.

“Rallies are expected to remain capped by the .8760/.8800 band. It is where the 55 day moving average meets minor psychological resistance. The market stays directly offered below here”.