- EUR / GBP has peaked for several weeks, then retreats.
- The pound sterling and the euro suffer from the strength of the dollar.
- A. Bailey of the BoE again ruled out negative rates.
After hitting new highs over several weeks in the region of 0.8870, EUR / GBP has encountered new sales pressure and is now back at band 0.8850 / 40.
EUR / GBP: next target emerges at 0.8900
EUR / GBP does a good job of keeping activity at the top of the range, trading at a glaring distance of 2 months, just above 0.8900 (0.8911 April 1st).
The cross was put under pressure shortly after peaking around 0.8870, all in response to increased selling pressure both on the market and on its former European counterpart. In fact, President Trump’s comments in favor of a strong greenback have given additional money at the expense of his main competitors.
Still in the UK, A. Bailey of the BoE reiterated that the central bank is not planning to cut rates in negative territory yet, while it sees inflation struggling to regain short-term upward traction .
In the United Kingdom, the RICS House Price Balance contracted by -21% for the month of April (against 9% gain), less than the expected drop of -38%. On this side of the Channel, German consumer prices rose 0.4% from April and 0.9% in the past twelve months. Later in the session, L. De Guindos of the ECB is scheduled to speak.
EUR / GBP key levels
The crossover gained 0.10% to 0.8848 and faced the next barrier at 0.8870 (highest monthly on May 14), followed by 0.9019 (highest monthly on October 20, 2019) and finally 0, 9324 (August 12, 2019 high). On the other hand, a fall below 0.8714 (200 day SMA) would expose 0.8670 (April 30 monthly low) then 0.8664 (100 day SMA).