EUR/GBP rejected at 0.9000, attempting to find support at 0.8930
- EUR/GBP rally from 0.8700 fails at 0.9000 and the pair pulls back to 0.8930 area.
- The euro fails to take advantage of a weak pound.
- The pair remains biased higher aiming to levels beyond 0.9000 – Commerzbank.
Euro rally from 0.8700 area has stalled below 0.9000 this week, with the EUR/GBP looking for support at 0.8930 lows, poised to close the week practically without changes.
The euro fails to take advantage of a weak pound
The euro has treaded water over the last sessions unable to leverage sterling’s overall weakness. The pound has been weighed across the board on Friday after UK retail sales showed 18% slump in April and government borrowing increased by a record £61.4 billion pushing the public debt to levels near 100% of the GDP, which has spooked investors away from the cable.
On the flip side, the euro has been hit by the dismal market mood after US President Trump spurred global tensions further. Trump has vowed with a “strong reaction” if China imposes new legislation in an attempt to curb protests in Hong Kong. These threats are the last episode of a verbal escalation with China that is triggering serious concerns further deterioration in global trade.
EUR/GBP: Poised to break above 0.8988 resistance – Commerzbank
According to Karen Jones, Team Head FICC Technical Analysis Research at Commerzbank, the EUR/GBP uptrend is still intact and the pair looks ready to appreciate beyond 0.9000, “We view the market as having recently based and our target is 0.9060. The base should remain valid while the cross continues to trade above the April low at 0.8671.”