FXStreet (Mumbai) - The ongoing broad US dollar weakness continues to boost both EUR and GBP, although the shared currency remains better bid versus the pound, driving EUR/GBP to 0.72 handle.
EUR/GBP heading towards 100 & 200-DMA located at 0.7219
Currently, the EUR/GBP pair gains 0.06% and trades at 0.7200, recovering from 0.7183 lows struck in Asian opening trades. The EUR/GBP cross extends its recovery from 0.7169 levels reached on Friday and jumps back on the bids, now eyeing 0.7219 as the next target – the confluence of 100 & 200-DMA.
The cross is seen posting moderate gains mainly driven by the euro strength across the board, as markets consolidate heavy losses seen in the common currency following dovish ECB hints on the QE program.
However, further gains in EUR/GBP remain capped as the GBP/USD pair rebounds higher this session, benefiting from broad based US dollar correction.
In the day ahead, the cross will be influenced by the German Ifo data while the broader market sentiment will also have significant impact.
EUR/GBP Technical Levels
To the upside, the next resistance is located at 0.7219 (100 & 200-DMA), above which it could extend gains to 0.7287/0.7300 (hourly 10-SMA & psychological levels). To the downside immediate support might be located at 0.7177 (daily S3) below that at 0.7148 (Aug 21 Low).
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