EUR/GBP picks up pace and targets the 0.9300 mark
- EUR/GBP has started the week on a positive fashion near 0.9300.
- The weaker dollar lends support to both the quid and the euro.
- Flash Manufacturing, Services PMIs next on the docket on Tuesday.
The renewed offered tone i the greenback is now giving extra legs to the single currency and the sterling, pushing at the same time EUR/GBP further north of the 0.9200 mark on Monday.
EUR/GBP set sails to 0.9500?
After two consecutive daily pullbacks, EUR/GBP has now regained poise and it has started the week on a firm note, re-visiting the boundaries of the 0.9300 mark although failing to extend the advance further up for the time being.
Both the European currency and the sterling have gathered extra pace on Monday after the Federal Reserve announced extra stimulus measures aimed to mitigate the impact of the coronavirus on the US economy.
Data wise in Euroland, the European Commission will publish its Consumer Confidence gauge for the month of March later in the session, ahead of flash PMIs in the core euro zone on Tuesday. In the UK, Markit’s Manufacturing and Services PMIs will also be released on Tuesday.
What to look for around GBP
The British Pound remains entrenched well into the negative territory at the beginning of the week, returning to levels last seen in times of the Plaza Accord in 1985 vs. the greenback and to multi-month lows vs. the euro. The announcement of extra easing by the BoE last week in combination with USD-strength are heavily weighing on the sterling and keep the bearish outlook unaltered for the time being. In addition, GBP is expected to remain under the microscope in light of the upcoming EU-UK trade negotiations to kick in later this year, while shaky UK fundamentals plus the impact of the coronavirus on the domestic and global economy open the door to the palpable possibility that the country could slip into recession in the near future.
EUR/GBP key levels
The cross is gaining 1.30% at 0.9287 and faces the next up barrier at 0.9499 (2020 high Mar.19) seconded by 0.9649 (monthly high January 2009) and then 0.9804 (monthly high December 2008). On the other hand, a drop below 0.8994 (low Mar.20) would expose 0.8822 (21-day SMA) and finally 0.8752 (200-day SMA).