Forex: EUR/GBP corrects Friday's rally, scope for 0.8800/30

FXstreet.com (Barcelona) - Investors are witnessing today a retracement of Friday's rally ~150-pip rally to 0.8717 high that benefited from a strong euro and a weakening British Pound. The EURGBP has gone as low as 0.8654, where it currently trades.

Spain added 132.10K unemployed in January, not as much as the 150K expected, but still a very negative change, taking in account December's -59.1K drop. Ahead are EMU Sentix Investor Confidence and EMU PPI. Spain's PM Rajoy will meet German Chancellor Merkel at 12:00 GMT.

"EURGBP has seen a weekly close above the 2009-2013 downtrend, currently at 0.8600. The break above this level is significant and we have no choice but to go with it and alter our medium term outlook accordingly", wrote Commerzbank analyst Karen Jones, now targeting 0.8800/30 (78.6% retracement of the move down from 2011 and the October 2011 high), ahead of a possible 0.9082 2011 high. "We have an accelerated uptrend at 0.8564, while above here the market is immediately bid", she added.