EUR/GBP was initially underpinned by better than expected German retail sales, up 1.5% vs 0.4% in the month of Sept, sparkling bullish sentiment across European equities with German yields rising in sympathy. However, month-end dollar demand on portofilio re-balancing flows at the 16GMT fixing saw EUR/USD move downhill off 1.3015 towards 1.2965, sales that hardly had an effect on GBP/USD, which continues to hold near highs at 1.6035. Both moves equated on a much weaker EUR/GBP through American hours.
From a technical standpoint, the latest EUR/GBP rally off sub 0.80, which started in early Oct, met with stiff resistance at 0.8163 on Oct 22, causing the price to come off a cliff to test round handle 0.80 last Friday - 61.8% fibonacci retrac from mentioned monthly rally -, from there, attemot for a bounce seems to be failing, with a decisive break of 0.8040 - occurring as we type - exposing the 0.8030 support - Oct 26 sequence of highs - ahead of 0.8020 - Oct 29 low - before 0.80 comes into play. On the upside, buyers should regain the 0.8080 but ideally not until 0.81 that the tech picture can clear up.