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21 May 2014
EUR/GBP challenges 0.8100
FXStreet (Edinburgh) - The bullish momentum of the sterling is dragging the EUR/GBP to print fresh 2014 lows in the vicinity of the critical support at 0.8100 on Wednesday.
EUR/GBP softer post-UK data
The cross is now accelerating its downside after UK Retail Sales surprised investor to the upside in April, expanding 1.3% inter-month and 6.9% over the last twelve months. Core sales, excluding the fuel component, also grew 1.8% MoM and 7.7% on a yearly basis. The cross is retreating for the fourth consecutive week so far, intensifying the decline after March tops in the boundaries of 0.8420. Further data showed a unanimous vote from MPC members to leave the BoE’s policy unchanged, with refi rate at 0.5% and the Asset Purchase facility at £375 billion. “Overall, while GBP could remain heavy near-term, we do not expect it to fall far. We continue to expect EUR/GBP to edge towards 0.80 medium-term”, added Jane Foley, Senior Currency Strategist at Rabobank.
EUR/GBP levels to watch
As of writing the pair is losing 0.30% at 0.8111 with the initial support at 0.8098 (low Jan.4 2013) followed by 0.8086 (2013 low Jan.3) and finally 0.8063 (low Dec.12 2012). On the flip side, a breakout of 0.8143 (high May 21) would expose 0.8154 (10-d MA) and then 0.8158 (high May 20).
EUR/GBP softer post-UK data
The cross is now accelerating its downside after UK Retail Sales surprised investor to the upside in April, expanding 1.3% inter-month and 6.9% over the last twelve months. Core sales, excluding the fuel component, also grew 1.8% MoM and 7.7% on a yearly basis. The cross is retreating for the fourth consecutive week so far, intensifying the decline after March tops in the boundaries of 0.8420. Further data showed a unanimous vote from MPC members to leave the BoE’s policy unchanged, with refi rate at 0.5% and the Asset Purchase facility at £375 billion. “Overall, while GBP could remain heavy near-term, we do not expect it to fall far. We continue to expect EUR/GBP to edge towards 0.80 medium-term”, added Jane Foley, Senior Currency Strategist at Rabobank.
EUR/GBP levels to watch
As of writing the pair is losing 0.30% at 0.8111 with the initial support at 0.8098 (low Jan.4 2013) followed by 0.8086 (2013 low Jan.3) and finally 0.8063 (low Dec.12 2012). On the flip side, a breakout of 0.8143 (high May 21) would expose 0.8154 (10-d MA) and then 0.8158 (high May 20).