- EUR/GBP resumes the upside and targets the mid-0.8800s.
- GBP-selling keeps fuelling the upside in the cross.
- Brexit Party was the clear winner in the EU elections.
The renewed selling bias in the British Pound is sponsoring today’s up move in EUR/GBP to fresh tops in the proximity of 0.8850.
EUR/GBP looks to Brexit
The European cross is extending the optimism at the beginning of the week, reversing Friday’s pullback and leaving intact the underlying bullish trend for the time being.
The cross has met contention around the 200-day SMA in the 0.8780 region so far, at the same time shifting the attention back to the critical resistance at 0.8850, levels traded for the last time in mid-January.
In the meantime, the US-China trade dispute remains in centre stage as driver for the price action in the global markets, whereas the future of Brexit stays in centre stage domestically.
Today’s calendar in the euro area showed ECB’s M3 Money Supply and Private Sector Loans expanding at an annualized 4.7% and 3.4%, respectively, during April.
In fact, and after the recent victory of the Brexit Party at the EU elections, all sort of speculations have emerged around the likeliness of another referendum, May’s potential successor and the continuation of the negotiation of the UK-EU divorce, all bringing in fresh uncertainty (and new sellers) to the Sterling.
EUR/GBP key levels
The cross is gaining 0.12% at 0.8835 and a break above 0.8850 (monthly high May 24) would expose 0.9062 (low Jan.11) and finally 0.9092 (2019 high Jan.3). On the flip side, the next down barrier aligns at 0.8787 (200-day SMA) seconded by 0.8724 (low May 21) and then 0.8632 (55-day SMA).