- Uncertainty surrounding the Brexit and the US Dollar (USD) pullback helps the EUR/GBP pair to remain strong.
- German Industrial Production and Sentix Investor Confidence can offer fresh impulse.
Given the investors’ U-turn from the greenback, coupled with the UK’s political plays, the EUR/GBP manages to hold on its latest strength while taking the rounds to 0.8960 ahead of the European open on Monday. Markets may now concentrate on second-tier data from Germany and Eurozone for near-term direction.
While Friday’s sluggish print of German Factory Orders pulled the Euro (EUR) backward from the top, investors remain skeptical amid doubts surrounding the Brexit and global risk-off moves during early Monday.
At Britain, the frontrunner to the UK Prime Minister’s (PM) race Boris Johnson continues holding its pledge to crash out of October 31 be it with deal or without, indicating brighter chances of a hard Brexit as the EU has already stated its no readiness to discuss the Brexit deal again.
On the flipside, latest data from the Eurozone have been downbeat and indicate brighter chances an extended bearish bias from the European Central Bank (ECB). German Industrial Production and Retail Sales for May month signal improvement in the bloc’s largest economy. The seasonally adjusted numbers suggest Industrial Production growth may improve to -0.4% from -1.9% on a monthly basis while the Trade Balance could have risen to €18.6 billion from €17.0 billion. Further, Eurozone Sentix Investor Confidence for July is expected to flash 0.0 mark versus -3.3 prior.
Considering the lack of major data, traders might keep seeking the clues of global trade protectionism and monetary policy trends from news headlines.
Technical Analysis
21-day simple moving average (SMA) level of 0.8935 and June 25 low near 0.8916 act as nearby supports for the pair whereas an upside clearance of 0.8994 needs validation from 0.9000 to aim for 0.9062 and 0.9100 during further advances.
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