EUR/GBP testing lows around 0.7550

FXStreet (Edinburgh) - EUR/GBP is now extending its correction lower, challenging intraday troughs in the mid-0.7500s.

EUR/GBP lower on euro weakness

The selling interest surrounding the European cross is following an offered tone in the riskier assets and in spite of better-than-expected Services PMI prints in the euro area. While the focus being on the next meetings between Tsipras-Juncker and Draghi-Varoufakis, the UK economy will publish its Services PMI, expected to have advanced to 56.3 in January from 55.8 previous.

In the view of Karen Jones, Head of FICC Technical Analysis at Commerzbank, “The Elliott wave count on the daily suggests that there is scope for a deeper retracement to .7655/.7735. The market has recently recovered off .7408 and is holding over the base of a 5 year down channel at 0.7392”.

EUR/GBP significant levels

The cross is now retreating 0.12% at 0.7560 with the next support at 0.7526 (low Feb.3) ahead of 0.7512 (10-d MA) and finally 0.7500 (psychological level). On the other hand a breakout of 0.7592 (high Feb.3) would open the door to 0.7597 (61.8% of 0.7715-0.7406) and then 0.7626 (21-d MA).