EUR/GBP unchanged around 0.8580 post-PMI

• The cross extends the upside to the 0.8580 region.
• UK manufacturing PMI matched estimates at 52.0.
• February’s EMU advanced CPI next of relevance.

The continuation of the offered bias surrounding the Sterling is allowing EUR/GBP to add to recent gains in the 0.8575/80 band.

EUR/GBP apathetic on UK data, looks to Brexit

The European cross is up for the second session in a row in the second half of the week, managing to rebound from recent lows near 0.8530 seen on Wednesday and last recorded in May 2017.

EUR/GBP remained practically unchanged after UK manufacturing PMI came in at 52.0 for the month of February, matching estimates. In addition, BoE’s Consumer Credit expanded to £1.095 billion in January and M4 Money Supply expanded at a monthly 0.2% during the same period. Further data saw Mortgage Approvals increasing to 66.77K during the first month of the year, surpassing prior surveys.

Looking ahead, key inflation figures in Euroland for the month of February should grab all the attention on this side of the Channel, while US ISM manufacturing will be the salient event later in the NA session.

What to look for around GBP

The British Pound is expected to remain under the microscope in the next weeks in light of key votes in March 12/13/14. Following recent news, the probability of a second referendum has diminished, while a ‘no deal’ scenario remains on the table and the extension of Article 50 is likely, albeit for just 2-3 months. On the broader picture, PM May made clear her intentions to remain in office to deal with the domestic agenda in the next months, opening at the same time another potential source of political uncertainty.

EUR/GBP key levels

The cross is gaining 0.02% at 0.8573 and a break above 0.8643 (10-day SMA) would expose 0.8711 (21-day SMA) and finally 0.8840 (high Feb.14). On the other hand, the next support emerges at 0.8528 (2019 low Feb.27) followed by 0.8402 (monthly low Feb.22 2017) and then 0.8382 (monthly low May 10 2017).