EUR/GBP drops below 0.8400 for the first time since February 2020
The pivotal level to watch on the day will be the 26 October low @ 0.8403 as the key support level, in which a break below that will solidify added downside momentum.
The pair saw its recent bounce capped by key trendline resistance and the 200-day moving average (blue line) and since then, sellers have took charge and we are seeing that momentum continue as BOE rate hike expectations are rebuffed this week.
A decent labour market report yesterday coupled with the inflation data earlier pretty much tees the BOE up to salvage its reputation going into the December meeting.
For now, the market is slowly believing in that and the pound is finding a bit of base as such – keeping gains against the euro as the single currency is looking vulnerable amid a lack of support on the way down for EUR/USD.