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  • EUR/GBP hovers around the 0.8520 region.
  • Brexit, geopolitics doing the rounds today.
  • UK Services PMI improved to 50.0 in December.

EUR/GBP alternates gains with losses on Monday against the backdrop of the firm tone in both the single currency and the sterling.

EUR/GBP focused on Brexit, looks to geopolitics

The European cross has given away initial gains and it has now returned to the negative ground after two consecutive sessions with gains, including a moderate rebound from last week’s lows in the mid-0.8400s.

In the broader scenario, the effervescence around Iran has been swelling without pause since the US drone strike last Thursday against the backdrop of escalating tensions, retaliatory threats and rumours that UK and US troops could leave Iraq. In this regard, PM B.Johnson is expected to meet with senior ministers later today to discuss the situation.

Around Brexit, PM B.Johnson reiterated there will be no extension to the 31st January deadline.

In the UK docket, the always-relevant Services PMI bettered to 50.0 in December, returning at the same time to the expansion territory. On this side of the Channel, the final gauge of Services PMI came in above estimates, while Producer Prices in the euro area and German Retail Sales also surpassed expectations.

EUR/GBP key levels

The cross is retreating 0.13% at 0.8519 and a breach of 0.8480 (21-day SMA) would expose 0.8453 (low Dec.31) and then 0.8275 (2019 low Dec.13). On the upside, the next barrier aligns at 0.8543 (55-day SMA) seconded by 0.8591 (high Dec.23) and finally 0.8714 (100-day SMA).