EUR/GBP advances to 3-week highs beyond 0.8500

EUR/GBP trades on a firmer footing above 0.8500 on Thursday.
The sterling extends the drop on EU-UK downbeat headlines.
EMU Consumer Confidence improved to -6.6 in February.

Pablo Piovano FXStreet

The renewed selling bias hitting the quid is helping EUR/GBP to regain the 0.8500 mark and above, clinching at the same time fresh multi-week highs.

EUR/GBP boosted by Brexit news

The British pound exacerbated the daily downside on Thursday (despite the persistent weakness in the greenback) after the UK shifted to a harder position ahead of the trade talks due to start on Monday.

Indeed, UK officials stressed that the country would abandon the negotiating table in June if there is no prospects of a ‘broad outline’ trade agreement and reiterated once again that the UK would not accept any alignment with EU rules.

Data wise, the Consumer Confidence in the euro area came in at -6.6 in February, a tad above January’s reading. Further releases saw the ECB’s Private Sector Loans expanding at an annualized 3.7% and the M3 Money Supply expanding 5.2% from a year earlier.

In the UK, BoE’s J.Cunliffe said that monetary policy can do little if anything at all regarding the supply shock provoked by the Chinese coronavirus.

EUR/GBP key levels

The cross is up 0.79% at 0.8499 and faces the next hurdle at 0.8537 (weekly/monthly high Feb.4) seconded by 0.8595 (2020 high Jan.14) and then 0.8746 (200-day SMA). On the downside, a drop below 0.8338 (weekly low Feb.25) would expose 0.8295 (2020 low Feb.13) and finally 0.8281 (2020 low Feb.18).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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