EUR/GBP alternates gains with losses around 0.9040

  • EUR/GBP stays side-lined around the 0.9040 region on Thursday.
  • Solid risk appetite trends lend support to the euro and the sterling.
  • UK-EU traded talks expected to resume the next week.

The positive momentum in the risk complex is sustaining the upside in both the sterling and the shared currency, motivating EUR/GBP to trade without a clear direction in the 0.9040 area for the time being.

EUR/GBP locked in within a consolidative theme

EUR/GBP is extending the monthly rangebound theme between 0.8970 and 0.9060 following gains in the British pound and its former European peer, all in response to the sharp correction lower in the greenback.

In the meantime, the quid managed well to leave behind Wednesday’s GDP data, which showed the economy contracted more than 20% during the April-June period, the largest drop since 1955. On the opposite side, auspicious readings from the German ZEW survey and the Sentix Index lent extra wings to the single currency as pf late.

In the calendar, German final CPI contracted at a monthly 0.5% in July and 0.1% from a year earlier. Later in the NA session, the always-relevant Initial Claims should keep the dollar under pressure.

EUR/GBP key levels

The cross is losing 0.07% at 0.9032 and a breach of 0.8969 (monthly low Aug.11) would expose 0.8937 (monthly low Jul.10) and then 0.8864 (monthly low Jun.9). On the flip side, the initial hurdle emerges at 0.9058 (monthly high Aug.5) seconded by 0.9148 (monthly high Jul.27) and finally 0.9175 (monthly high Jun.21).

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