EUR/GBP: on the way to 0.8840

EUR/GBP is continuing to make its tracks tot he downside as UK data adds to the bullishness in sterling and announcements that BoE's Carney will remain in position to steer the economy through the Brexit process is also a plus for positive sentiment.
Currently, EUR/GBP is currently trading at 0.8915 with a high of 0.8938 and a low of 0.8876.

For euroland, we had better than expected German ZEW Investor Confidence data (-10.6 this month versus -13 expected). However, the data failed to give the EUR any real support as the market drifted lower from a squeeze to the mid 1.16s. At the same time, Italian bonds continued to recover and in comparison to German 10Y bunds, this was prompting a continuation of the narrowing in spreads by around 2bps on the day (to +247bps).

As for the UK data revealed, investors were encouraged by the steady unemployment (4.0%) and a further pick up in wages. Another plus was the weekly earnings and ex-bonus payments that were reaching +2.9% in the Jul year.

"Consistent with the balance of risks facing the UK, and BoE Governor Carney’s signalling, we expect one further rate hike from the MPC in 2019, which is currently one hike less than the Bloomberg consensus. Today’s data are broadly consistent with the BoE’s outlook for wages, and as such are unlikely to lead to a renewed hawkish shift on the MPC,"

Bill Diviney, senior economist argued.

Then, the Treasury made an announcement that the BoE Gov. Carney would stay in his position beyond his term in order to help see the economy through the Brexit process.

EUR/GBP levels

EUR/GBP has been in a downward spiral on recent Brexit headlines since 0.9098 and is on the way down to 0.8840 which will nullify the breakout channel that occurred in late June.

"Attention has reverted to the downside. It has eroded the 55 day ma and we would allow for a deeper slide to the 0.8855 2nd August low. We have a 5 month uptrend at 0.8852 and the 200 day ma at 0.8833 and there is scope for these to be retested,"

analysts at Commerzbank explained.

Share: Feed news

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.