EUR/GBP’s reversal from 0.8965 contained above 0.8915
- EUR?GBP's reversal finds support at 0.8915, remains within previous ranges.
- The pound appreciates on Brexit deal hopes.
- UK macroeconomic data underpins GBP demand.
The euro lost ground on Friday, retreating from Thursday’s high at 0.8965, against a firmer GBP, amid the upbeat comments from Brexit negotiators. The pair, however, has been supported above 0.8915 area and remains moving within previous ranges.
The pound nudges up on hopes of a Brexit deal
The cable has appreciated against its main peers after European Commission President, Ursula van der Leyden affirmed that she had observed progress on the negotiations over the last weeks, with movement on important files.
European and UK representatives have confirmed Van der Leyden’s views suggesting that the positions on key issues are getting closer and that a trade deal might be imminent. These comments have boosted optimism after Thursday’s disappointment when the talks had to be suspended due to a COVID-19 infection.
Apart from that, UK macroeconomic data has contributed to underpin GBP demand. British retail sales increased by 1.2% in October and 5.8% year on year, according to National Statistics. This is the eighth consecutive increase in retail consumption, which confirms the resilience of the sector in times of coronavirus and eases fears about the UK’s economic outlook.
EUR/GBP remains steady above 0.8915 support
From a technical perspective, the EUR/GBP is consolidating above 0.8900 with upside attempts capped below 0.8950. On the upside, above 0.8960 (November 19 high) next area of interest lies at 0.9000 (November 12 and 13 high) and 0.9050/65 where the November 5 and 6 highs meet the 50 and 100-day SMAs.
On the downside, below 0.8915 (November 18,19 lows), the pair might aim a key support level at 0.8860 (September 3, November 11 low). If that level is broken, the next target might be 0.8800/10 (May 4, 11 highs).
Technical levels to watch