According to Mikael Milhoj, senior analyst at the firm
Milhoj says that the pair faces some upside risks in the 'very near-term' on the back of Brexit rhetoric as well as the upcoming ECB meeting later today.
He argues that there were no surprises in the EU's stance on Brexit from yesterday's release here, but points out that Brexit negotiations will continue to be a source of volatility that will weigh on the sterling.
"We still see EUR/GBP risks skewed to the upside on the ECB meeting tomorrow. 0.8982 is the key level to watch out for on the upside. A break above this level could open up for a test of 0.90. The strong rhetoric and the very different views on Brexit between the UK and EU are part of the game and fully expected at this stage", Milhoj says.
But he notes that medium and long-term investors should look for opportunities to sell EUR/GBP on rallies.
