- EUR/GBP pushes higher beyond 0.9160 on Monday.
- The sell-off in the sterling is sustaining the move in the cross.
- German flash June CPI next of relevance in the docket.
The selling pressure continues to pick up pace around the British pound and is now lifting EUR/GBP to the 0.9160 region, levels last traded in late March.
EUR/GBP up on GBP-selling, Brexit woes
EUR/GBP climbed to fresh multi-month tops following an exacerbated sell-off in the sterling and a firmer note surrounding its ex-European peer.
In fact, the quid is adding to Friday’s losses following unabated concerns around the impact of the coronavirus pandemic on the UK economy as well as uncertainty surrounding the Brexit talks.
On the latter, negotiators D.Frost (UK) and M.Barnier (EU) will meet today in Brussels in what will be the start of a crucial week in the EU-UK trade negotiations, with the deadline to extend the post-Brexit transition period (that ends on December 31) finishing on June 30.
On the data front, all the attention will be on the publication of the flash June CPI in Germany. Earlier in the session, the BoE’s Consumer Credit contracted by nearly £5 billion in May while Mortgage Approvals dropped to 9.27K during the same period. Closer to home, EMU’s Consumer Confidence matched the preliminary reading at -14.7 for the current month.
What to look for around GBP
The pound is expected to remain under the microscope this week, as the EU and the UK will try to clinch a trade deal always with an extension of the transition period in the centre of the debate. Further drivers weighing on the quid come in the form of probable extra stimulus by the BoE (negative rates?) in the near-term and further deterioration of UK fundamentals amidst the coronavirus pandemic.
EUR/GBP key levels
The cross is gaining 0.80% at 0.9161 and faces the next hurdle at 0.9324 (2019 high Aug.12) followed by 0.9499 (2020 high Mar.19) and finally 0.9649 (monthly high January 2009). On the downside, a breach of 0.8864 (monthly low Jun.9) would expose 0.8818 (100-day SMA) and then 0.8701 (200-day SMA).
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