EUR/GBP falls to a low of 0.8854 on the day
The 2 August low also comes in at 0.8854 and the pair looks to be on the verge of breaking below that now. The key level to watch on the chart though will be that 100-day MA (red line) @ 0.8864. Hold below that level and sellers will break the bullish bias in the pair seen since July.
The pound continues to be underpinned across the board rising higher against the dollar as well with cable trading to a high of 1.3217 moments ago. But for EUR/GBP, break below the 2 August low @ 0.8854 and it opens up a move towards the 200-day MA (blue line) @ 0.8838 next.
If that gives way, then the bias in the pair turns more bearish and a test of the 0.8800 level will be on the cards. Beyond that, there is further support only seen at 0.8750 and 0.8720 before the 61.9 retracement level @ 0.8693 comes into play.
But much like other pound pairs, watch out for Brexit headlines to disrupt the picture. That remains the real risk in trading the quid at the moment. Make sure you define and limit your risk well. It’s never fun to get caught out by a major whitewash without a properly defined stop loss.