EUR/GBP bias still down, watching for break of 0.8743 14th July low

Currently, EUR/GBP is trading at 0.8767, down -0.08% on the day, having posted a daily high at 0.8812 and low at 0.8760.

EUR/GBP is on its knees, (bias still down), as sterling traders pick up some cheap sterling on dips, encouraged by the BoE pocking the embers of rate hikes again.

BoE: prodding the embers of BoE tightening talk again - Scotiabank

EUR/GBP is, however, managing to hold above the 0.8747 level that was yesterday's low. Month-end buying has been supporting the cross while at the same time, German institutes say that the ECB should prepare to exit ultra-loose policy. However, ECB's Praet says talking about recalibration, not exit. Sterling also met supply when the BoE's Carnet mentioned that UK real income will suffer due to Brexit and MP cannot be the solution. 

BoE's Carney: MonPol cannot prevent weaker real income growth likely to accompany Brexit

BoE prepares market for rate rise - ANZ

However, in the wake of the reflation trade and sollar strength, eyes are fixated on EUR/USD flows to the downside with risks below 1.1725 and the 38.2% of the June-Sept 1.1119-1.2092 rise at 1.1720 that was breached Wednesday for a run to 1.1515 at the base of the cloud. 

Such a move with sterling better supported in the wake of dollar positive flows exposes risks for EUR/GBP to the downside: 0.8722 is where the 200-DMA is located and 0.8712 is where the 55-WMA is located.

EUR/GBP levels

Analysts at Commerzbank noted that EUR/GBP remains under pressure but will shortly encounter stronger support at the 0.8743 14th July low and we would allow for further consolidation. "Between here and 0.8713 we have a LOT of support namely the 55-week ma, the 200-day ma and the 2015-2017 uptrend," they acknowledged, adding,  "we note the TD perfected set up and the divergence of the daily RSI and will tempted back into tiny long positions. Below .8700 would target the 0.8530/78.6% retracement of the move seen this year."