EUR/GBP: consolidates sterling strength on 0.8320 support

EUR/GBP had been making steady progress on the downside, although has stalled today in widespread consolidation.

Sterling was bid overnight, but was capped at 1.3460/70 vs the US dollar and 0.8318/20 vs the euro having been as low as 0.8247 previously on the 14th July.

It remains all about the EU, BoE and ECB. "MPC member Martin Weale spoke this morning about the impact of Brexit on monetary policy," noted analyst sat TD Securities. "As we had expected, he affirmed his place as the hawk on the MPC, saying that he does not know if he will back a rate cut at the BoE’s 4 Aug meeting, that early action on rates is not needed as there is no sense that consumers or businesses are panic stricken, and that the BoE should wait for firmer evidence before changing policy." Meanwhile the ECB will likely be a non event this week.

EUR/GBP levels

Analysts at Commerzbank explained that EUR/GBP charted an inside day on Friday and remains near term downside corrective and the Elliott wave count on the daily is pointing to a 0.8229/.8110 retracement prior to recovery", explained analysts at Commerzbank, adding"Intraday rallies are likely to struggle 0.8445/80 and we will remain downside corrective while capped here. Beyond a small correction the market remains on course for the .8815 February 2013 peak.  Dips lower will find initial support at .8320/.8228, the 38.2% retracement ahead of .8116 the April 2016 high."