- EUR / GBP reversal finds support at 0.8915, remains within previous ranges.
- The pound appreciates on hopes of a Brexit deal.
- UK macroeconomic data supports demand for GBP.
The euro It lost ground on Friday, retreating from Thursday’s high of 0.8965, against a firmer GBP, amid optimistic comments from Brexit negotiators. The pair, however, has held above the 0.8915 area and remains moving within the previous ranges.
The pound rises on hopes of a Brexit deal
The pound has appreciated against its main peers after the president of the European Commission, Ursula van der Leyden, affirmed that she had observed progress in the negotiations in recent weeks, with movement in important files.
European and UK representatives have confirmed Van der Leyden’s views suggesting that positions on key issues are looming and that a trade deal could be imminent. These comments have raised optimism after Thursday’s disappointment when talks had to be suspended due to a COVID-19 infection.
Other than that, UK macro data have helped prop up demand for GBP. British retail sales rose 1.2% in October and 5.8% year-on-year, according to national statistics. This is the eighth consecutive increase in retail consumption, confirming the sector’s resilience in times of coronavirus and easing fears about the UK economic outlook.
EUR / GBP remains stable above the 0.8915 support
From a technical perspective, the EUR / GBP is consolidating above 0.8900 with limited bullish attempts below 0.8950. On the upside, above 0.8960 (November 19 high), the next area of interest is 0.9000 (November 12 and 13 high) and 0.9050 / 65, where the November 5 and 6 highs meet with the 50 and 100 day SMAs.
On the downside, below 0.8915 (Nov 18-19 lows), the pair could target a key support level at 0.8860 (Sep 3, Nov 11 low). If that level breaks, the next target could be 0.8800 / 10 (May 4, 11 highs).