EUR/GBP Recovers From ‘Brexit’ Poll Led Fall, Still Below 0.7800
After an initial downward spike to 0.7751 during Asian session, attempted recovery to 0.7835 faded and the EUR/GBP pair has now moved back below 0.7800 handle.
Earlier during the day, the EUR/GBP cross fell sharply after the latest Times YouGov polls revealed that ‘Remain’ cap took a lead back by a single point. However, given the outcome of the recent polls on EU referendum that remained inclined towards the 'Leave' camp, market participants were speculating that a wrong big figure entered on an order might have caused a big up-surge for the British Pound.
With just over 2-week left for the key EU referendum, the British Pound might continue to derive its moves based on the outcomes of various polls. However, uncertainty surrounding 'Brexit' and its implication on the UK economy is likely to cap any big up-move for the Sterling.
From technical perspective, the EUR/GBP cross failed to capitalize on its weekly gap-up opening above 50-day SMA on Monday and reversed from 0.7900 handle. Tuesday's fall has now dragged the cross back below 100-day SMA region. A sustained trade below 100-day SMA now seems to open room for further depreciating move for the cross.
Technical levels to watch
On the immediate downside, today's swing low near 0.7750 might be eyed to extend some immediate support. This is immediately followed by a strong horizontal support near 0.7730 level, below which the pair seems to extend its weakening trend towards retesting 0.7665-60 strong horizontal support.
On the flip side, 0.7820 zone now seems to act as immediate resistance, above which the pair seems all set to resume its near-term upward trajectory and make a fresh attempt to reclaim 0.7900 handle with 0.7860 acting as intermediate resistance.