EUR/GBP is currently trading with a bearish bias, topped out after an attempt to break thee sideways channel formed at the top of the 0.7777 rally. The pound got some profit taking support and the greenback is giving back gains made this week on poor durable goods ahead of tomorrow's GDP. The recovery in the pound comes in an environment where the UK referendum on its EU membership and the resulting threat of ‘Brexit' have already taken their toll on financial markets, as explained by analysts at ING. Brexit stone is rolling, damage ahead - ING Meanwhile, EUR/GBP has already appreciated 7% since the beginning of the year "We do not see the EUR as the currency to play the Sterling downside view. But, if the UK remains a member of the European Union, the Pound would likely move significantly stronger against the EUR in H2 and beyond: on our forecast currently we expect 15% Sterling upside over a 12-month period," explained analysts at Golman Sachs. "Short cable is our preferred implementation of the weak Sterling view in the event of a Brexit. Long positions in EUR/GBP are much less convincing, given that Brexit would not be good news for the rest of Europe." EUR/GBP levels While trading below the 0.7013 pivot, EUR/GBP targets 0.7880 and a break below opens the 200 sma on the 1hr sticks at 0.7845 as last defense for the 0.7800/10. On the flip side, 0.7880 guards 0.7900/20, 0.7944 R1, R2 at 0.7975 and R3 0.7995. For more information, read our latest forex news.