EUR/GBP bounces off 6-month lows, approaches 0.8600

EUR/GBP regains some shine on GBP-selling.
Recent multi-month lows align in the mid-0.8500s.
Economic Sentiment in Germany improved in November.

Pablo Piovano FXStreet

The Sterling is correcting lower following Monday’s advance and is also helping EUR/GBP to regain some poise and trade closer to the key barrier at 0.8600 the figure.

EUR/GBP looks to politics, unfazed by ZEW

Despite the softer tone in the quid on Tuesday, the renewed and moderate selling pressure in the euro is now undermining the positive momentum around the European cross, which has so far met strong hurdle in the 0.8600 neighbourhood.

Both the euro and the pound are suffering the recovery in the greenback on the back of higher yields and increasing optimism on the US-China trade front. Regarding the latter, President Trump will speak later today and he could probably unveil further details on the current progress of the negotiations around the ‘Phase One’ deal.

Back to the UK elections, the Conservative Party remains in the lead as per the latest poll results, while the positive effects on the quid following N.Farage’s comments on Monday continue to fade away.

Data wise today, the key ZEW survey showed the Economic Sentiment improved in both Germany and the broader Euroland this month, although it remains within the negative territory. On the other side of the Channel, the labour market report came in on a mixed tone: while the jobless rate tocked lower to 3.8% in the three months to September, both the Claimant Count Change and the Average Earnings +Bonus came in short of expectations at 33.0K and 3.6%, respectively.

EUR/GBP key levels

The cross is advancing 0.02% at 0.8584 and faces the next hurdle at 0.8619 (21-day SMA) seconded by 0.8667 (78.6% Fibo of the May-August rally) and then (0.8676 (high Oct.24). On the flip side, a breach of 0.8557 (monthly low Nov.11) would expose 0.8488 (monthly low May 6) and finally 0.8474 (2019 low Mar.12).

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.

EUR/USD looks weak below 1.1800

EUR/USD has slipped back under pressure, breaking through the 1.1800 support and drifting towards the weekly lows near 1.1770 ahead of the opening bell in Asia. The move reflects renewed strength in the US Dollar, with steady geopolitical tensions keeping its demand firm. Moving forward, the release of the German labour market report and flash inflation figures should keep European investors entertained on Friday.

GBP/USD threatens the 200-day SMA near 1.3440

GBP/USD rapidly leaves behind Wednesday’s strong advance, coming under heavy pressure and retesting the 1.3440 zone, where the critical 200-day SMA is located. Cable’s deep pullback follows the strong gains in the Greenback, while investors continue to pencil in a potential BoE rate cut in March.

Gold trims gains, slips back to around $5,170

Gold is now facing some downside pressure, hovering around the $5,170 region on Thursday. The yellow metal surrenders part of its earlier gains on the back of the resurgence of the buying interest in the Greenback. In the meantime, geopolitical tensions in the Middle East continue to limit the downside potential for now.