EUR/GBP upside failed again near 0.8650

  • The cross extends the sideline theme in the mid-0.8600s.
  • EMU Economic Sentiment improved in April.
  • Rumours of a second referendum stays on the rise.

EUR/GBP has once again failed to extend the upside momentum beyond 0.8650 today, returning instead to the 0.8630 region, up modestly for the day.

EUR/GBP struggles around the 55-day SMA

The European cross keeps meandering the upper end of the recent range, although a move further north of the 0.8650 area appears elusive for the time being. The area is coincident with the key 55-day SMA.

The cross came under pressure earlier today in response to comments from ECB members, noting that a rebound in the projections for economic growth in Euroland in the second half of the year now looks unlikely.

In the data space, both German and EMU Economic Sentiment improved in April, according to the latest ZEW survey. On the not-so-bright side, German Current Conditions failed to meet forecasts, coming in at 5.5 for the current month.

In the UK, Claimant Count Change rose by 28.3K jobs in March, while Average Earnings +Bonus expanded at an annualized 3/5%. In addition, the jobless rate stayed put at 3.9%.

On the Brexit front, speculations over the likelihood of a second referendum have been on the rise as of late, particularly after the extension of Article 50, although UK negotiators keep talking down that scenario.

EUR/GBP key levels

The cross is advancing 0.14% at 0.8637 and faces the next hurdle at 0.8657 (high Apr.12) seconded by 0.8722 (high Mar.21) and finally 0.8762 (100-day SMA). On the downside, a break below 0.8592 (21-day SMA) would expose 0.8502 (low Apr.3) and then 0.8483 (low Mar.27).

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