EUR/GBP: Two-way business below 0.88 handle, eyes on at 0.8620/18

  • EUR/GBP has recovered from the European lows down at 0.8743 as price pulls back in a consolidative mood across the board following economic data in Europea that was not supportive for the pound nor the euro. 
  • EUR/GBP is currently trading at 0.8770, from a high of 0.8796 from a low of 0.8743.

EUR/GBP has offered good two-way business on Tuesday following balanced headlines on the economic and political front. The cross is taking its cues from the persistent and frustrating uncertainty over Brexit which has become more apparent in recent UK data and surveys.

UK 4Q GDP and December production data highlighted falls in fixed asset formation and broader business investment which will be something for the BoE to take note of. However, they do not meet again until 21st March, a week before the current Article 50/Brexit deadline,

Markets are now weighing up the likely main outcomes of which analysts at Westpac described below, merely to provide an indication of outcome potentials and open to many changes: 

           # A deal around May’s plan (and extended transition): 40-60%
           # Extension of the 29th March deadline: 30-40%
           # Fall into a no deal 10-20%

Meanwhile, there was a moderately dovish message from the BoE put sterling under pressure in the knee-jerk reaction to the decision. We have seen cable spike lower where it is now trading around 1.2850, off the lows of 1.2833 which has left the cross better bid, although broader trading ranges seem likely to prevail until more clarity emerges on the political front. It is also worth keeping an eye on the 10Y gilt yield because a move below 1.15% could drag sterling along for the ride. Meanwhile, UK headline inflation came in a tick below market expectations, at 1.8% y/y, while core inflation held steady at 1.9% y/y. The headline figure, however, was exactly in line with the BoE's week-ago forecast, so should provide no surprises there.

EUR/GBP levels

"Currently the market remains in upside corrective mode and we are unable to rule out gains to .8840/90 where we look for signs of failure. We have minor support at .8723 and this guards the .8620/18 lows. Only failure at .8620/18 would suggest ongoing weakness to the base of the channel at .8545 and potentially the 200 week ma at .8357. The market stays directly offered below the 200 day ma at .8863, and only above here allows for a move to the 55 day ma at .8889 and this, together with the October .8941 high, are expected to contain the topside," analysts at Commerzbank explained.

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD extends slide, nears the 1.1200 figure

The shared currency is suffering from speculation the ECB will steepen easing and German Business Sentiment falling by more-than-anticipated. Upbeat US Retail Sales sent the pair further down toward the 1.1200 figure.



GBP/USD collapsed to fresh 2019 lows

Robust employment data fell short of supporting the Pound, badly hurt from mounting fears about a hard-Brexit, after PM’s candidates, Johnson and Hunt said that the Irish backstop is “dead” and would seek for a new daily, something the EU is not willing to do.


USD/JPY climbs to 4-day tops above 108.30, retreats on Trump comments

The USD/JPY pair gained traction in the second half of the day and rose to a fresh session high of 108.36.


Gold keeps the red near $1410 level ahead of Powell’s speech

Gold finally broke down of its consolidative trading range and tumbled to fresh session lows, below $1410 level during the early North-American session.

Gold News

Gold in search of a firm direction, stuck in a range ahead of US data/Powell

Gold lacked any firm directional bias and seesawed between tepid gains/minor losses through the mid-European session on Tuesday.

Read more