EUR/GBP struggles for direction near 0.9150

  • EUR/GBP trims initial gains and returns to 0.9150.
  • BoE left the monetary conditions unchanged at its meeting.
  • UK Retail Sales came in below estimates in February.

The recovery in the sterling continues to undermine the monthly rally in EUR/GBP, which is now navigating the mid-0.9100s after climbing well above 0.9200 the figure during early trade.

EUR/GBP focused on data, BoE

EUR/GBP keeps looking for a clear direction in the second half of the week following two consecutive daily pullbacks, all amidst the better mood surrounding both the sterling and the single currency on the back of persistent weakness in the dollar.

No news from the BoE earlier in the session, as it left the refi rate and the asset purchase facility unchanged at 0.10% and £645 billion, respectively, matching the broad consensus.

The BoE noted it remains ready to expand the ongoing asset purchases in order to support the economy and to prevent further tightening of financial conditions. Additionally, the central bank sees inflation picking up pace following a significant depreciation of the quid in the longer run.

In the UK docket, UK headline Retail Sales contracted at a monthly 0.3% and 0.5% when comes to Sales excluding the Auto sector, both readings missing forecasts. Closer to home, the German Consumer Climate tracked by GfK dropped to 2.7 for the month of April, coming in short of estimates.

What to look for around GBP

The British Pound keeps correcting higher so far this week, bouncing off levels last seen in times of the Plaza Accord in 1985 vs. the greenback and multi-month lows vs. the euro during last week. The extra stimulus from the Fed and the US government lent oxygen to the sterling and has been sustaining the recovery in past sessions. However, the quid is expected to remain under the microscope in light of the upcoming EU-UK trade negotiations, while shaky UK fundamentals plus the impact of the coronavirus on the domestic and global economy open the door to the palpable possibility that the country could slip into recession in the near future.

EUR/GBP key levels

The cross is losing 0.14% at 0.9136 and a drop below 0.9054 (weekly low Mar.25) would expose 0.8994 (low Mar.20) and then 0.8930 (21-day SMA). On the flip side, the next resistance lines up at 0.9499 (2020 high Mar.19) seconded by 0.9649 (monthly high January 2009) and then 0.9804 (monthly high December 2008).

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.

Feed news

FXStreet Trading Signals now available!

Access to real-time signals, community and guidance now!

Latest Forex News

Editors’ Picks

AUD/USD buyers catch a breath around three-week high above 0.6200

Following its run-up to a three-week top, not to forget consecutive three-days of rising, AUD/USD pauses for a break around 0.6230 at the start of Thursday’s Asian session. Virus data continues to challenge the world, a light economic calendar ahead.


USD/JPY aims for 109.00 amid risk reset, BOJ’s Kuroda, US Jobless Claims eyed

While extending its recovery moves from the recent low of 108.60, USD/JPY rises to 108.90 ahead of the Tokyo open on Thursday. The latest coronavirus updates from the US, comments from the Fed’s Kaplan weigh on the market’s risks.


WTI holding form around $26bbls ahead of OPEC+

WTI crude sliding below key $26 handle ahead of OPEC+. The market was supported on Wednesday in New York with a weekly decline in crude production as well as the anticipation of production cuts as a consequence of OPEC+ meeting today.

Oil News

Gold: Stuck in a short-term descending triangle above 200-HMA

Gold prices remain mildly positive near $1,647 amid the early Thursday morning in Asia. The yellow metal remain in the small range after stepping back from Tuesday’s high. Buyers look for an upside break of the triangle resistance, 50-HMA.

Gold News

What to expect from OPEC and G20

Equities and currencies traded higher today after Dr. Fauci, the US’ Director of National Institute of Allergy and Infectious Diseases said there could be a COVID-19 turnaround next week.

Read more