- The pound remains under pressure in the market after the BoE.
- EUR / GBP prolongs weekly gains and approaches key resistance.
The EUR / GBP is rising for the second day in a row and for the fourth time in the last five days. The weekly advance is the most important since April. The crossover hit 0.8594, the highest since early September.
The data released on Friday from the Eurozone were below expectations. Both the industrial production in Germany and the retail sales in the Eurozone. But this only seems to have limited the advance of the EUR / GBP, without implying changes in the trend.
The pound for its part continues to weaken, unable to recover from what the Bank of England meeting left behind. The central bank kept monetary policy unchanged, and had a “dovish” tone according to analysts; reaffirmed by Governor Bailey on Friday. Added to this are growing concerns about the differences between the United Kingdom and the European Union over Brexit.
The EUR / GBP has approached the key resistance of 0.8600 and also at the 200-day moving average (0.8495). In case of breaking above, more strength would be expected for the euro and a test first at 0.8630 and then at 0.8660 / 70, where is the peak of September and July.
In case of not being able to with 0.8600, a consolidation ahead at higher levels could be expected. A fall below 0.8520 would take time out of the euro, finding the next support at 0.8470 (horizontal level and 20-day moving average).