- The better mood around the single currency lifts the cross higher.
- UK Q1 GDP seen at 0.5% inter-quarter and 1.8% YoY.
- Industrial, Manufacturing Production surprised to the upside.
The up move in EUR/GBP remains well and sound at the end of the week, although the 0.8650 region has emerged as a tough barrier for the time being.
EUR/GBP eased from multi-day peaks
The European cross reached fresh multi-day tops near 0.8650 on Thursday before shedding some ground amidst an improved tone around the shared currency and increased volatility in the British Pound.
In fact, the riskier assets keep looking to developments from the US-China trade front as the main driver for the price action, while a cautious stance among investors prevails so far in light of today’s meeting between US and Chinese negotiators.
Today’s UK calendar showed the economy is seen expanding at 0.5% QoQ and 1.8% on a yearly basis, both prints matching consensus. In addition, Industrial Production expanded 0.7% in March from a month earlier and Manufacturing Production expanded 0.9% MoM.
What to look for around GBP
Market participants have shifted their focus to the resumption of cross-party talks between the government and the opposition, although there is no significant progress yet. Today’s publications from the industrial sector somewhat confirmed the rebound seen in the previous month, although it remains unclear whether this bounce in activity was exclusively driven by companies stockpiling in case of a ‘hard Brexit’ or a more ‘genuine’ expansion. In addition, the current steady stance from the Bank of England appears justified by below-target inflation figures, mixed results from key economic fundamentals and somewhat slowing momentum in wage inflation pressures, all adding to already rising speculations of a ‘no-hike’ this year.
EUR/GBP key levels
The cross is gaining 0.18% at 0.8636 and a break above 0.8648 (high May 9) would expose 0.8681 (high Apr.23) and finally 0.8722 (high Mar.21). On the other hand, the next support lines up at 0.8488 (low May 6) followed by 0.8483 (low Mar 27) and then 0.8471 (2019 low Mar.13).
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