EUR/GBP -- Key test lies ahead
The pair is trading in a subdued range so far today but the battleground has been defined. Those two levels above are key for buyers to break in order to gain momentum for the next leg higher. Otherwise, this is about as good as it gets for the pair currently.Month-end flows do come into play for the pair, majority of it would have been done last week as well (position clearing before weekend as a convenient factor too).
What's left for this week?
UK PMI data is expected to show a rebound from weather-related symptoms, while Eurozone data sees inflation and GDP reports to be released on the week.It's not likely we'll get any major jolt like the one we saw on Friday in response to the UK GDP report, so expect more of a return to the norm this week.For buyers, the key will be getting above the levels mentioned above in order to sustain a move to test the 200-day MA (blue line) and the 38.2 retracement level @ 0.8928.For sellers, risk levels can be defined and limited by those same key levels mentioned above but the pair needs to make its way below the 0.8740 (clearing the 100 and 200-hour MAs) level before near-term momentum starts shifting back towards the downside.