EURGBP
The EURGBP is looking for the next direction after the pound saw strong gains on the return of Brexit talks this week. Wednesday’s advance in the pound hints of further gains ahead for sterling but this pair has been see-sawing for a long-time and the outcome of Brexit talks will define the path forward.
The latest round of talks come as the deadline edges closer and reports say both sides are looking for a deal by mid-November. A speech to the EU on Wednesday by the Chief Negotiator Michel Barnier was significant, where he acknowledged Britain’s desire for sovereignty and serious talks leading to a legal text. This gave traders hope that a deal is the more likely outcome in the weeks ahead.
Data this morning showed that U.K. retail sales beat expectations and had risen for the fifth month in a row. Analysts were looking for a 3.7% rise but the number came in at 4.7%. The number shows some resilience in the U.K. consumer, however the number crashed -18.3% in April and after a strong rebound in May and June, retail sales are averaging gains of 2% per month in a sector that badly needs support.
Today will be a defining day for the EURGBP with services and manufacturing PMIs coming from German, Eurozone, and U.K. economies. All three economies are expected to see lower number than last month, so a beat would see a bid emerge in the relative currency.
The price of EURGBP crashed through the 50-day moving average yesterday and this puts the pair on the back foot. The current price is also at the support levels near 0.9000 so the next target is 0.8870, which was the low on September 2nd. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.
