EUR/GBP loses upside momentum below the 200-day SMA

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  • EUR/GBP advanced near 0.8790, where sits the 200-day SMA.
  • The cross loses ground after 10 daily advances in a row.
  • Speculations on the rise regarding May’s successor.

Today’s mild bid tone around the Sterling is forcing EUR/GBP to recede some ground after briefly testing the 0.8780 region.

EUR/GBP looks to Brexit

Despite the daily pullback, the European cross manages to keep the trade in the area of 3-month peaks well above 0.8700 the figure against the backdrop of a pick up in the demand for riskier assets.

In fact, as the US-China trade talks remain in a pause-mode for the time being, the risk-associated space appears to have regained some attention although the broader sentiment stays far from changed.

On the Brexit front, speculations regarding who’s going to replace Theresa May in Number 10 remain on the rise, while rumours around the probability that B.Johnson could be the next PM are also gathering traction.

In the data sphere, Producer Prices in Germany rose 0.5% inter-month in April and 2.5% over the last twelve months, while EMU’s Current Account eased a tad to €24.7 billion in March.

EUR/GBP key levels

The cross is losing 0.16% at 0.8755 and faces initial contention at 0.8722 (high Mar.2) seconded by 0.8685 (100-day SMA) and then 0.8607 (55-day SMA). On the flip side, a break above 0.8791 (200-day SMA) would expose 0.8821 (high Feb.5) and finally 0.8840 (monthly high Feb.14).

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