EUR / GBP rises well above 0.9000

• EUR / GBP touches new highs in the 0.9030 / 35 band.
• The selling bias around the pound oxygenates the move.
• The UK Manufacturing PMI surprised to the upside at 57.5 in December.

The pessimistic tone surrounding the pound favors the daily recovery of the EUR/GBP above the key 0.90 level on Monday.

EUR / GBP rises on the strength of the EUR

Renewed selling pressure around the British pound contributes to the upside at the cross to 2-day highs in the 0.9030 / 35 zone, while flirting with the 100-day SMA (0.9034). In the same vein, the strong bid tone in the European currency also underpins the daily rebound of the EUR / GBP.

Meanwhile, the British pound remains center stage after the last-minute Brexit deal, while investors appear to have shifted their focus to the performance of the UK economy amid the coronavirus pandemic, the launch of the vaccine. (versus the new variant of the virus) and the probability that the Bank of England will move rates below 0 in the coming months.

In the UK data sphere, the December manufacturing PMI was better than expected at 57.5 (from 55.6) while mortgage approvals also surprised to the upside at 104.97K in November. Other data saw Bank of England consumer credit at -1.539 billion in November and M4 money supply expanding at 0.8% monthly over the same period.

Technical levels

The cross is up 0.99% to 0.9032 and faces the next ascending barrier at 0.9047 (21-day SMA) followed by 0.9229 (December 11 monthly high) and then 0.9291 (September 11 monthly high). On the other hand, a breakout of 0.8978 (200-day SMA) would expose 0.8942 (weekly low on December 31) and finally 0.8861 (monthly low on November 11).