EUR/GBP rally faltered ahead of 0.8850, focus on PM May

The cross met moderate resistance near 0.8850.
UK Retail Sales surprised to the upside in April.
All attention on the probable resignation of PM T.May.

Pablo Piovano FXStreet

The now improved tone around the Sterling is prompting a correction lower in EUR/GBP to the 0.8825/20 band.

EUR/GBP focused on data, Brexit

The European cross is shedding part of the recent strong gains in response to the better mood around the British Pound in recent hours.

In fact, today’s results from the UK docket saw Retail Sales coming in flat on a monthly basis during April and expanding 5.2% from a year earlier. In addition, Core sales contracted 0.2% inter-month and 4.9% over the last twelve months, all prints coming in above initial estimates.

On the Brexit front, (still) PM Theresa May is facing critical hours as pressure for her departure continues to escalate, particularly after Commons Leader A.Leadsom stepped down earlier in the week. Furthermore, PM May’s Brexit plan is not expected to be debated before early June.

EUR/GBP key levels

The cross is retreating 0.13% at 0.8821 and faces the next support at 0.8788 (200-day SMA) seconded by 0.8724 (low May 21) and then 0.8624 (55-day SMA). On the other hand, a break above 0.8839 (monthly high May 22) would expose 0.9062 (low Jan.11) and finally 0.9092 (2019 high Jan.3).

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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