- The euro retreated after rising to a fresh 4-1/2 month peak against the British pound earlier in the session.
- Sterling attempted a minor recovery as investors wait to see the extent of the British government’s fiscal response to the virus outbreak.
- Investors now await the Bank of England policy meeting outcome on Thursday, alongside the government’s budget today, after incoming BoE governor Andrew Bailey suggested there should be coordinated action.
- EUR/GBP is trading 0.2 percent down at 0.8716, having hit a high 0.8847 earlier, its highest since October 11.
- Momentum indicators are bearish on hourly charts: RSI weak at 37, MACD supports downside and Stochs are biased lower.
- Immediate resistance is located at 0.8868, a break above could take it near 0.8886.
- On the downside, support is seen at 0.8682 (5-DMA), a break below could drag it till 0.8667 (7-EMA).
Recommendation: Good to sell on rallies around 0.8741 with stop loss of 0.8766, and target price of 0.8696.
