EUR/GBP: Danske Bank maintains a bearish bias and believes the pair can continue to decline

Danske Bank maintains a bearish bias on the EUR/GBP after Monday's technical breakout.

"The EUR/GBP broke below 0.88 on Monday, hitting a new one-month low of 0.8762, and the bearish move was not caused by a specific Brexit news item or a data release, and therefore GBP's performance appears to be a continuation of a gradual re-evaluation of the Brexit risk premium.

We remain bullish on the GBP in the medium term, targeting 0.85 on the EUR/GBP within 12 months, but note that a bearish break could come earlier, and that the pair could decline much lower."