EUR/GBP weaker, struggles around 0.8600

After a dip to lows near 0.8570, EUR/GBP has managed to retake the key 0.8600 handle albeit still well into the red territory.

EUR/GBP in 7-week lows

The European cross has extended its decline to the 0.8570/65 band earlier today, levels last seen in late September, although it managed to gather some pace soon afterwards to the current 0.8600 neighbourhood.

In the meantime, the buying interest around the British pound continues its march north, particularly accentuated after recently elected US President D.Trump advocated for stronger link trades between both economies.

Absent data releases in the UK docket, EMU’s calendar showed German inflation figures during October have matched their preliminary prints, although the reaction among traders was muted.

Looking ahead, the US political scenario is expected to driver the sentiment, at least in the near term, while in the longer run the ‘hard/soft Brexit’ theme should return as the main driver behind GBP’s price action.

EUR/GBP key levels

The cross is now retreating 0.94% at 0.8598 and a breach of 0.8387 (low Sep.6) would open the door to 0.8248 (low Jul.14) and finally 0.8226 (200-day sma). On the upside, the immediate hurdle lines up at 0.8739 (55-day sma) followed by 0.8907 (20-day sma) and then 0.9143 (high Oct.11).

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