- The euro was offered at the start of this week on the political uncertainty after German election result.
- Weak German IFO survey and ECB's Coeure & Draghi's less than hawkish comments also weighed.
- EUR/GBP hits fresh 2-month lows at 0.8754 before paring some losses to edge higher.
- Recovery in the pair was capped at 5-DMA at 0.8795, the pair is currently trading around 0.8776.
- Technical studies are bearish, bears eye 200-DMA at 0.8718. Violation there could see further weakness. Scope then for test of major trendline at 0.8665.
Support levels - 0.8718 (200-DMA), 0.87, 0.8665 (trendline)
Resistance levels - 0.8795 (5-DMA), 0.8885 (Sept 22 high), 0.8920 (38.2% Fib retrace of 0.82970 to 0.93064 rally)
Recommendation: Short rallies around 0.8780, SL: 0.88, TP: 0.8720/ 0.87/ 0.8665
FxWirePro Currency Strength Index: FxWirePro's Hourly EUR Spot Index was at -109.497 (Bearish), while Hourly GBP Spot Index was at 15.9788 (Neutral) at 0815 GMT. For more details on FxWirePro's Currency Strength Index, visit http://www.fxwirepro.com/currencyindex.
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