EUR/GBP: Broader risk seen lower with key support at 0.8866/64 – Credit Suisse

EUR/GBP has extended its decline to key price support at 0.8866/64, which is expected to hold at first. Notwithstanding, with a top in place below 0.8937, economists at Credit Suisse look for a break in due course with support then seen at the 200-day average at 0.8781.

Key quotes

“EUR/GBP has extended its decline following the completion of a top below the July low at 0.8937 for a test of support at 0.8866/64 – the highs of April and lows of June and also the 61.8% retracement of the April/June rally. We continue to look for this to hold for no for some near-term consolidation, but with a break expected in due course with support then seen next at the 200-day average and 78.6% retracement of the April/June rally at 0.8781/79 and eventually back at the April low at 0.8671.” 

“Near-term resistance remains at 0.8920, then 0.8949, with 0.8967/76 ideally continuing to cap. Above can raise the prospect of further range trading with resistance seen next at 0.9038/45, with the overall risk still seen lower whilst below 0.9070/72.”