- EUR/GBP clings to daily gains in the 0.8960 region.
- EMU Retail Sales contracted 0.3% MoM in May.
- ECB-speak next of relevance.
The broad-based sideline theme in the global markets is motivating EUR/GBP to trade within a tight range but always below the 0.9000 mark for the time being.
EUR/GBP still capped by 0.9000
The European cross is up for the third session in a row on Thursday, coming down from yesterday’s weekly peaks in levels just shy of 0.8990 and pips away from multi-month tops recorded in late June.
As usual, uncertainty in the UK political scenario continues to be an important drag for the Sterling, while both candidates to succeed Theresa May at Number 10 – Boris Johnson and Jeremy Hunt – have already confirmed that the ‘no deal’ scenario remains on the table for the time being.
Also adding to GBP-weakness, BoE’s M.Carney remains concerned about the global uncertainty and in particular about Brexit limbo, which remains the exclusive obstacle when comes to build prospects on the UK economy. In addition, markets have already started to price in the likeliness of lower rates in the next months in light of the relentless deterioration of UK fundamentals.
In the data space, Retail Sales in Euroland contracted at a monthly 0.3% during May and expanded 1.3% from a year earlier, both prints coming in below initial estimates.
EUR/GBP key levels
The cross is gaining 0.09% at 0.8972 and a break above 0.8992 (monthly high Jun.17) would expose 0.9062 (low Jan.11) and finally 0.9092 (2019 high Jan.3). On the other hand, the next down barrier aligns at 0.8925 (21-day SMA) seconded by 0.8872 (low Jun.20) and then 0.8826 (low Jun.5).
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