- EUR/GBP unable to extend beyond 0.9000 dips to test session lows at 0.8940.
- Brexit negotiators’ commitment to giving a fresh impulse to the talks has eased pressure on the GBP.
- Analysts at Credit Suisse suggest a potential bullish triangle formation above 0.9056.
The euro is going through a moderate pullback against the British pound, hovering above session lows at 0.8940 after being rejected near the 0.9000 line on Wednesday’s early European session. The commitment between the UK and EU negotiators to try to find an agreement has eased negative pressure on the GBP, which remains still vulnerable to the UK’s economic data and the BoE’s monetary policy plans.
Hopes of a Brexit agreement bring some relief to the pound
The sterling has regained some ground over the last two days after leaders from the Eurozone and the UK decided to intensify Brexit talks over the coming weeks to reach an agreement. British Prime Minister, Boris Johnson, affirmed that the agreement could be reached in July, which has eased fears of an abrupt exit from the Union in December.
Brexit optimism however has been tamed by lower than expected UK inflation figures, with inflation posting the sharpest contraction since 2016 on the back of plunging demand and lower oil prices. These figures pave the path for the Bank of England to announce a step up on its bond-buying program as it is widely expected to do after its monthly monetary policy meeting, which is due to end on Thursday.
EUR/GBP likely to build a bullish triangle pattern above 0.9056 – Credit Suisse
In a bigger picture, the FX Analysis team at Credit Suisse sees the pair biased higher likely to shape a bullish triangle pattern on a break of 0.9056 resistance, Resistance is seen at 0.8997 initially, then 0.9025/28, above which should clear the way for a move back to the recent high and ‘measured base objective’ at 0.9056/57. Above here is needed to confirm a bull ‘triangle’ and resumption of the uptrend from March with resistance then seen next at the 50% retracement of the March/April fall at 0.9086 and eventually at the 61.8% retracement at 0.9184.”
EUR/GBP Key levels to watch
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.
Recommended content
Editors’ Picks
EUR/USD edges lower toward 1.0700 post-US PCE
EUR/USD stays under modest bearish pressure but manages to hold above 1.0700 in the American session on Friday. The US Dollar (USD) gathers strength against its rivals after the stronger-than-forecast PCE inflation data, not allowing the pair to gain traction.
GBP/USD retreats to 1.2500 on renewed USD strength
GBP/USD lost its traction and turned negative on the day near 1.2500. Following the stronger-than-expected PCE inflation readings from the US, the USD stays resilient and makes it difficult for the pair to gather recovery momentum.
Gold struggles to hold above $2,350 following US inflation
Gold turned south and declined toward $2,340, erasing a large portion of its daily gains, as the USD benefited from PCE inflation data. The benchmark 10-year US yield, however, stays in negative territory and helps XAU/USD limit its losses.
Bitcoin Weekly Forecast: BTC’s next breakout could propel it to $80,000 Premium
Bitcoin’s recent price consolidation could be nearing its end as technical indicators and on-chain metrics suggest a potential upward breakout. However, this move would not be straightforward and could punish impatient investors.
Week ahead – Hawkish risk as Fed and NFP on tap, Eurozone data eyed too
Fed meets on Wednesday as US inflation stays elevated. Will Friday’s jobs report bring relief or more angst for the markets? Eurozone flash GDP and CPI numbers in focus for the Euro.