EUR/GBP retakes 0.8500 and beyond, weekly tops

The offered bias around the Sterling is allowing EUR/GBP to clinch fresh weekly peaks above the key 0.8500 handle.

EUR/GBP up on GBP weakness

The selling pressure around GBP has intensified today following disappointing results from UK’s Industrial and Manufacturing Production during October. That, plus a somewhat steady stance around the single currency has propped the upside in the European cross today to levels above the 0.8500 limestone.

The cross is so far reverting five consecutive weeks of losses after breaking below the consolidative theme that prevailed during mid-October around the psychological 0.9000 handle, with quite decent support in the 0.8300 neighbourhood.

Looking ahead, the next big event facing the cross will be the ECB meeting tomorrow. Consensus remains biased towards some modification of the current QE programme (likely an extension beyond March 2017) among additional measures, although the refi rate and deposit facility rate should stay unchanged.

Later in the session, NIESR GDP Estimate is only due.

EUR/GBP key levels

The cross is now advancing 0.75% at 0.8511 and a break above 0.8582 (high Nov.30) would expose 0.8637 (100-day sma) and finally 0.8710 (high Nov.15). On the other hand, the next support lines up at 0.8298 (low Dec.5) followed by 0.8292 (200-day sma) and then 0.8248 (low Jul.14).