EUR/GBP: bulls in charge, price above key 55-day ma, awaiting key UK data this week

• The pound was dipping on a win on Parliment for Brexiteers and indeed impressive US retail sales revisions.
• As ever, its all been toing and froing when it comes to the Brexit saga.

EUR/GBP has been subject to ongoing Brexit shenanigans, with the pound dipping on a win on Parliment for Brexiteers and indeed impressive US retail sales revisions. EUR/GBP has popped from a low of 0.8816 to 0.8853 while cable dropped from 1.3293 to 1.3216.  

The US dollar flows have kept dealing desks busy on Monday with the week kicking off with strong revisions to US retail sales. US retail sales came as 0.05%, in line with 0.5% expectations vs the prior +0.8% that was revised to +1.3%. The US Empire manufacturing index for July was also a beat, arriving at 22.6 vs 21.0 expected.  

As far as domestic events go for the pound and euro, markets are awaiting EZ  CPI this week along with a full schedule for the UK. We have the UK labour market report, June (Tuesday), UK producer prices, June (Wednesday), UK retail sales, June (Thursday) and UK public finances, June (Friday).  

Brexit shenanigans

As ever, its all been toing and froing when it comes to the Brexit saga. The White Paper sparked a number of key position resignations post UK PM May’s Chequers day away when she presented to the cabinet her plans for negotiating Brexit terms with Brussels; a plan that had concerned President Trump and indeed the Brexiteers that came with more holes in it than the English 2018 World Cup football team’s defence.  However, in parliament today, four customs bills amendments were put forward by the eurosceptics and PM May, looking to hang onto her job, accepted them  – a win for the Brexiteers.  

“Speaking earlier, Patel told Bloomberg that May’s plan meant giving more away to the EU, rather than taking back control. “We are going to become a tax collector for them,” she said. “The white paper isn’t a white paper, it’s a white flag,”” – Bloomberg

EUR/GBP levels

Analysts at Commerzbank explained that EUR/GBP spent last week holding sideways and starts this week still neutral. “The 55 week moving average at 0.8863 has been eroded but we have yet to see a close above here. For now, the market remains bid very near term while above the 55-day ma at 0.8792. We favour the upside but it is looking tired. We would allow for a recovery to the 0.8969 recent high and the 0.9034 October 2017 high,” the analysts argued.