FxWirePro: EUR/GBP extends bounce off daily cloud, Pound extends pullback after downbeat updates on Brexit deal

Chart - Courtesy Trading View 

Spot Analysis:

EUR/GBP was trading 0.19% higher on the day at 0.8880 at around 07:10 GMT, extending previous session's spike.

Previous Week's High/ Low: 0.8891/ 0.8783

Previous Session's High/ Low: 0.8896/ 0.8769

Fundamental Overview:

The British Pound under pressure after downbeat updates surrounding the Brexit deal. The Democratic Unionist Party’s (DUP) dissatisfied regarding the mismatch between Brexit deal and UK PM Sunak’s promises, weighing on sentiment.

Neutral comments from Bank of England (BoE) Governor Andrew Bailey and downbeat prints of the UK S&P/CIPS Manufacturing PMI add further pressure on the Sterling.

Focus now on  Friday’s key final readings of the UK S&P Global/CIPS Services PMI for February for further impetus.

On the other side, the single currency remains bid as German inflation data solidifies hawkish ECB bets. 

Eurozone's three major economies Germany, Spain and France have reported higher-than-anticipated inflation figures on Wednesday. 

This shows an overall rebound in the price pressures, suggesting the ECB will likely continue its 50 bps policy tightening spree till the May policy meeting.

Technical Analysis:

- EUR/GBP is extending bounce off daily cloud support

- RSI has turned bullish and has edged above 50 mark

- Stochs have rolled over from oversold levels

- MACD is on verge of bullish crossover on signal line

Major Support and Resistance Levels:

Support - 0.8837 (21-EMA), Resistance - 0.8941 (Upper BB)

Summary: EUR/GBP has paused downside with Dragonfly Doji, price action has retraced above daily cloud. Technical indicators are turning bullish. The pair is poised for further upside.