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  • EUR/GBP came within a whisker of the 0.8700 level but has since pulled back to trade closer to 0.8650.
  • To the downside, support in the form of the 50-day moving average sits at 0.8640.

EUR/GBP came within a whisker of the 0.8700 level early on during the European session but has since pulled back to trade closer to the 0.8650 mark and actually at one point fell below it, though is now consolidating in the 0.8660s. To the upside, the big figure is the key area of resistance to note while, to the downside, the 50-day moving average sits at 0.8640. At present, the pair trades with losses of about 10 pips or 0.1% on the day.

Driving the day

In terms of fundamental catalysts out of the EU and UK, there isn’t anything particularly consequential to update on. The Covid-19 pandemic news out of the EU has been mixed; German public health authorities are calling for a national lockdown to contain the third wave, a Paris hospital trust is reportedly predicting the third wave to peak in France on the 20 April and Italy is slated to ease Covid-19 restrictions for most of the country soon.

Sticking with the EU; German trade and industrial production numbers for the month of February were released early in the European session. The latter showed a slightly smaller than expected trade surplus of EUR 19.1B, though this was driven by a larger than expected MoM growth rate in imports, which can hardly be seen as a bad thing. Meanwhile, industrial production unexpectedly posted a MoM contraction of 1.6% versus forecasts for an expansion of 1.5%.

Turning to the UK the vaccine rollout continues to go well and infection rates remain low, with the country on track to reopen a large part of its economy at the start of next week. Focus now is on travel to and from the UK; the government’s travel taskforce will announce early next month which countries will be included in the red, amber or green categories as part of a new traffic light system based on virus risk, and the task force will also confirm if international travel can resume from 17 May as is currently planned. At the moment, traveling for holiday is illegal and all must have a “valid reason” for leaving the country if they plan to return.