EUR/GBP: sterling getting walloped again, fresh high for day at 0.9132

EUR/GBP is on the up yet again with a very bearish outlook for the pound as markets seek to take it off a cliff, yet the BoE is not yet concerned about Sterling volatility.

EUR/GBP rallied to the psychological 0.9000 recently and has made another advance to 0.9101 today on the back of the media that have used 'The Times leak' to proclaim that if the UK pursues the so-called "hard Brexit" option of leaving the single market and EU customs union, the UK's gross domestic product (GDP) could fall by as much as 9.5 per cent if it reverts to World Trade Organisation rules - this translates to an annual sum of $66b.

Markets like to push the barriers and this is what we are seeing in Sterling. The question now is where will it base and where is too far too soon in market's standards let alone the BoE's own standards. The pound is fully exposed to not just the Brexit concerns, but the greenback is strong in its own right. However, EUR/USD is also struggling and this should help slow down any potential crash in the pound and subsequent rally in the cross again.

EUR/GBP levels

"The currency pair remains immediately bid while above the 0.8689 support line," argued analysts at Commerzbank. "Above 0.9100 we have various Elliott wave counts that suggest that the move will extend longer term towards the 0.9250/0.9375 area."

Meanwhile, with spot trading at 0.9110, we can see next resistance ahead at 0.9131 (Daily High), 0.9295 (Weekly Classic R1), 0.9583 (Weekly Classic R2), 0.9892 (Weekly Classic R3) and .Support below can be found at 0.9104 (Daily Classic R3), 0.9074 (Daily Classic R2), 0.9043 (Yesterday's High), 0.9041 (Daily Classic R1) and 0.9029 (Hourly 20 EMA).