“¢ British Pound gets a fresh boost from today’s upbeat UK retail sales.
“¢ Brexit optimism exerts some additional downward pressure.
“¢ Bearish slide seemed unaffected by a strong bid tone around the EUR.
The EUR/GBP cross extended its sharp intraday retracement from the 0.8900 neighbourhood and has now broken below 100-day SMA to hit two-month lows.
After yesterday’s sharp fall from levels beyond the 0.8900 handle, the cross kept losing ground on Thursday and was further weighed down by surprisingly positive UK monthly retail sales figures.
This coupled with incoming positive Brexit comments revived hopes for an eventual EU-UK deal, which provided an additional boost to the British Pound and kept exerting downward pressure on the major.
Meanwhile, the prevalent strong bid tone surrounding the shared currency did little to lend any support, with the GBP price dynamics turning out to be an exclusive driver of the pair’s slide to the lowest level since July 17.
Looking at the broader picture, the cross has now broken below 100-day SMA for the first time since late June and hence, a follow-through weakness, led by some fresh technical selling, remains a distinct possibility.
Technical levels to watch
Immediate support is pegged near the 0.8835-30 region, below which the fall could further get extended towards the 0.8800 handle. On the flip side, attempted recovery beyond the 0.8865 region (100-DMA) might now be capped at the 0.8900 handle.
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