- The cross moves higher on GBP-selling, clinches the 0.88 handle.
- UK Retail Sales disappointed expectations in December.
- PM T.May starts her cross-party talks on a ‘Plan B” for Brexit.
The now selling bias around the Sterling is motivating EUR/GBP to inch higher and retake the critical 0.880 handle and above.
EUR/GBP supported near 0.8760
The European cross is now picking up extra pace on the back of the current knee-jerk in the demand for the British Pound, all in the wake of the publication of UK Retail Sales.
In fact, GBP is on the defensive today after headline Retail Sales contracted at a monthly 0.9% during the last month of 2018 and expanded 3.0% from a year earlier. Additionally, Core sales also disappointed estimates, contracting 1.3% inter-month and rising at an annualized 2.6%.
In the meantime, GBP stays in centre stage, as PM Theresa May is expected to start her cross-party talks in order to come up with an alternative Brexit plan, which will be discussed by Parliament on January 29. It is worth recalling that May’s Brexit deal was rejected by the House of Commons by a large margin, although the PM has survived the J.Corbyn-led no-confidence vote afterwards.
EUR/GBP key levels
The cross is now gaining 0.52% at 0.8815 and a break above 0.8860 (200-day SMA) would open the door to 0.8901 (55-day SMA) and then 0.8985 (high Jan.15). On the other hand, the next support is located at 0.8763 (2019 low Jan.17) seconded by 0.8723 (monthly low Oct.10 2018) and finally 0.8655 (monthly low Nov.13 2018).
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