- The euro eased from a 4-1/2 month peak against the British pound recorded in the prior session.
- Data showing UK construction PMI increased to 52.60 points in February from 48.40 points in January supported the British currency.
- However, Britain’s trade talks with the EU and expectations of interest rate cuts kept sterling near recent lows.
- EUR/GBP is trading 0.3 percent down at 0.8699, having hit a high 0.8741 on Monday, its highest since October 15.
- Momentum indicators are turning bearish on hourly charts: RSI point south, MACD supports downside and Stochs are biased lower.
- Immediate resistance is located at 0.8745 (200-DMA), a break above could take it near 0.8768.
- On the downside, support is seen at 0.8676, a break below could drag it till 0.8657.
Recommendation: Good to sell on rallies around 0.8725 with stop loss of 0.8745, and target price of 0.8676.
