Is EUR/GBP about to rebounce?
The EUR/GBP, which suffered substantial losses in the last couple of sessions, fell further on Tuesday with the pair finding support at the 0.8540 area. At 0.8563 this morning the pair is rebounding and is challenging a declining trend line. With the RSI approaching the 70 level on the 1-hours chart, the technical set-up further supports the possibility of a rebound. As the bulls seem to have the wind behind their back, next key resistance level to watch sits at 0.855. A break above that area would open the door to 0.8619. We do expect a bit of noise at this area, but as long as we remain above 0.8504 there is no reason for the bulls to worry. Traders have a lot to absorb on the economic data front today with the BoE due to publish minutes from this month’s MPC meeting. All eyes will be on the votes in favour of an expansion of QE. Later in the day, the spotlight turns to the Fed for the FOMC policy announcement.
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