EUR/GBP eyeing a break of the 0.85 handle, cable bid as well

Currently, EUR/GBP is trading at 0.8508, down -0.83% on the day, having posted a daily high at 0.8597 and low at 0.8493.

EUR/GBP has dumped  and is testing the bull's commitments on the 0.8500 and sterling is also up vs the greenback while markets begin to back peddle on the Trump reflation trade especially as we head into the Fed today against a backdrop of worsening US data in the GDP and durable goods, while PCE remained in line wit expectations. 

Meanwhile, data from the UK had Nationwide’s house price index rising 0.2% in January, a little lower than expected while the manufacturing PMI index slowed to 55.9 (from 56.1), noted analysts at Scotiabank, adding, "the details of the PMI data showed a record gain in factory costs, however, with the weak GBP driving the input price component that rose to 88.3, a record. Inflation risks are on the BoE’s radar and the data have helped lift the GBP through the European session but we see no change in policy settings at tomorrow’s BoE meeting."

EUR/GBP levels

EUR/GBP is headed for a test of the 0.8500 support and below there will trigger losses initially towards the 0.8420 that guards the 0.8304 December low. "Intraday rallies are indicated to be likely to struggle circa 0.8575/0.8600. Although the intraday Elliott counts are conflicting," explained analysts at Commerzbank, adding, "The market has recently reversed from Fibo resistance and the top of the cloud at 0.8853, and the downside risk has increased. We assume that 0.8852/53 is a short-term top for the market."