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EUR/GBP recedes from multi-week tops near 0.8870

  • EUR/GBP clinched multi-week highs, retreats afterwards.
  • Both the sterling and the euro suffers the dollar’s strength.
  • BoE’s A.Bailey ruled out once again negative rates.

After climbing to fresh multi-week highs in the 0.8870 region, EUR/GBP met renewed selling pressure and it has now returned to the 0.8850/40 band.

EUR/GBP: Next target emerges at 0.8900

EUR/GBP is managing well to keep business in the upper end of the range, trading at shouting distance from 2-month tops just above 0.8900 the figure (0.8911 April 1st).

The cross came under pressure soon after clinching tops around 0.8870, all in response to increased selling pressure in both the quid and its ex European peer. In fact, comments by President Trump favouring a strong greenback gave extra legs to the buck in detriment of its main competitors.

Still in the UK, BoE’s A.Bailey reiterated the central bank is not contemplating reducing rates to the negative territory for the time being, while he sees inflation struggling to regain upside traction in the short-term horizon.

In the UK docket, the RICS House Price Balance contracted -21% for the month of April (from 9% gain), less than the forecasted -38% drop. On this side of the Channel, German consumer prices rose 0.4% from a month earlier in April and 0.9% over the last twelve months. Later in the session, ECB’s L. De Guindos is due to speak.

EUR/GBP key levels

The cross is gaining 0.10% at 0.8848 and faces the next up barrier at 0.8870 (monthly high May 14) followed by 0.9019 (monthly high Oct.20 2019) and finally 0.9324 (2019 high Aug.12). On the other hand, a drop below 0.8714 (200-day SMA) would expose 0.8670 (monthly low Apr.30) and then 0.8664 (100-day SMA).

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