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EUR/GBP: bears cap advance through the 0.90 handle, but still better bid?

  • EUR/GBP: bid as market focusses on US economy, improving EZ sentiment and deadlock Brexit negotiations.\
  • EUR/GBP: headed back to the 12th Oct highs?

EUR/GBP: Currently, EUR/GBP is trading at 0.8969, up 0.10% on the day, having posted a daily high at 0.9016 and low at 0.8954. EURUSD is firmer but marginally off the overnight peak in the mid-1.18s and has now recouped all the ground lost in late Oct following the ECB’s tapering decision. This has left the cross chasing the bid also, against a backdrop where the markets are focussing on the US economy while the German economy is proving to be strong, pulling in the yield differentials that are aiding the euro's rise currently. 

  • US: CPI for all items increases 0.1% in October as shelter index rises
  • United States Retail Sales (MoM) above expectations (0%) in October: Actual (0.2%)
  • EUR: More to give? - Rabobank

Sterling can't shake off the Brexit pessisim

For sterling, it is the laggard of the two while expectations of a further BoE hike have been squashed by a run of disappointing data. Today there was a disappointing 14k drop in Sep employment, (the first drop since last Oct). However, wage data showed average weekly earnings up 2.2%, a little better than expected while the unemployment rate remained unchanged at 4.3%. However, the political environment in respect of the shaking foundations that PM m/ay is trying to negotiate Brexit from is a major concern for Sterling bulls while talks between the EU and the UK over the terms and timing of the “divorce” appear to almost stationary, dragging on positive sentiment and offsetting anything remotely positive from the UK's economic performance. Thus, EUR/GBP is better bid.

  • UK: Signs of slowing in the labor market - BBH
  • BoE’s Broadbent: Not inevitable to say rates will rise as Brexit proceeds

EUR/GBP levels

Analysts at Commerzbank noted that EUR/GBP has eroded the short term downtrend and the 55 day ma and in doing so we should see further strength to the 0.9034 12th October 2017 high, where they suspect that it will struggle. "Above here would target 0.9093 then 0.9187. Dips lower should find initial support 0.8790 ahead of major support band, namely the 200 day ma at 0.8771, the September low at 0.8746 and the 55 week ma at 0.8720," analysts at Commerzbank added.

US CPI: Soft headline, but core inflation is strengthening - Wells Fargo

Consumer price inflation rose more slowly in October due to a pullback in energy prices, but core inflation picked up, explained analysts from Wells F
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GBP/USD fades in play at 1.32 area - Scotiabank

Analysts at Scotiabank explained that Sterling is struggling to improve against a generally softer USD.  Key Quotes: "Cable remains supported around
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