EURGBP retreats to levels near 0.8700 after rejection at 0.8820
|- The Euro pares gains on Thursday and dives to the 0.8700 area.
- A brighter market mood has eased negative pressure on the GBP.
- EURGBP to remain consolidating between 0.8600 and 0.8800 – Barclays.
The Euro is trading lower on Thursday, extending its reversal from the four-week highs at 0.8820 seen on Wednesday. Failure to breach 0.8800 during the early European session has increased negative pressure, pulling the pair to session lows right above 0.8700.
The Pound picks up amid a brighter risk sentiment
The Sterling has managed to pare losses on Thursday, shrugging off the negative witnessed over the previous days on the back of the Bank of England’s negative outlook for the UK economy.
In the absence of key macroeconomic data in the UK or the Eurozone, an improved risk sentiment, with world equity markets surging after the release of US CPI data, has contributed to easing negative pressure on the Pound.
In the Eurozone, European Central Bank Governing Council member, Isabel Schnabel, has reiterated the bank’s hawkish stance, affirming that “there is no time for monetary policy pause” as inflation expectations remain broadly anchored. The impact of these comments on the EURGBP, however, has been muted.
EURGBP expected to remain between 0.8600 and 0.8800 – Barclays
From a wider point of view, currency analysts at Barclays Research see the pair trapped within a consolidation range: “GBP received little support from the BoE last week which yet again pushed against what they see as excessive market pricing. Accordingly, the recent 0.86-0.89 range will likely continue to define the sterling path versus the EUR in the near term.”
Technical levels to watch
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