EUR/GBP faded the spike to 0.8400 on coronavirus, Brexit

EUR/GBP trades on the defensive and retreats from the 0.84 area.
EU ministers approved the EU-UK trade talks mandate.
UK’s CBI Distributive Trades Survey came in below estimates at 1.

Pablo Piovano FXStreet

The bid bias around the sterling is contrasting with the selling mood hitting its ex-European peer on Tuesday and is dragging EUR/GBP to the 0.8360 region at the time of writing.

EUR/GBP focused on EU-UK trade, politics

EUR/GBP is giving away part of Monday’s advance and at the same time is fading the earlier bullish attempt to the 0.8400 neighbourhood, where is located the 21-day SMA.

News around the cross cited the EU ministers approved their mandate for post-Brexit trade talks, which are expected to start next Monday and are seen as a key driver for the quid in the months to come.

On the EUR-side, the currency is suffering the recovery attempt in the greenback, while omnipresent concerns around the COVID-19 keep favouring the safe havens in detriment of the funding currency.

Earlier in the session, no news from the German final Q4 GDP figures, which showed the economy expanded 0.3% on an annualized basis and came in flat inter-quarter. In the UK, the CBI Distributive Trades Survey came in below estimates at 1 for the current month, although a tad above January’s 0 reading.

EUR/GBP key levels

The cross is losing 0.30% at 0.8362 and a breach of 0.8343 (weekly low Feb.24) would expose 0.8295 (2020 low Feb.13) would expose 0.8281 (2020 low Feb.18) and then 0.8248 (monthly low July 2016). On the other hand, the next resistance of note appears at 0.8415 (high Feb.20) seconded by 0.8457 (55-day SMA) and then 0.8537 (weekly/monthly high Feb.4).

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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