EUR/GBP recedes from recent highs

3 June, 2019

EUR/GBP keeps the positive note so far in the mid-0.8800s. After printing tops near 0.8870 on Friday, the cross recedes some ground. Uncertainty around Brexit and UK government weigh on Sterling.

The continuation of the bid tone around the shared currency is propping up the daily gains in EUR/GBP around the mid-0.8800s.

EUR/GBP upside faced resistance near 0.8870

The upside momentunm in the European cross managed to climb to fresh tops in the 0.8870/75 band on Friday, although the up move lacked of follow through, sparking today’s mild correction lower to the 0.8840 region.

On the Brexit front, Foreign Secretary Jeremy Hunt said earlier today he would favour a ‘no deal’ scenario in case he becomes Primer Minister. In this regard, candidates to succeed Theresa May keep flowing in, although there are still no favourites among them.

In addition, UK manufacturing PMI disappointed expectations during May, adding extra selling pressure to the British Pound. Later in the week, Construction PMI is due tomorrow ahead of the more relevant gauge of the services sector on Wednesday, Governor Carney’s speech on Thursday and house prices tracked by the Halifax index closing the calendar on Friday.

EUR/GBP key levels

The cross is gaining 0.02% at 0.8841 and a break above 0.8874 (monthly high May 31) would expose 0.9062 (low Jan.11) and finally 0.9092 (2019 high Jan.3). On the flip side, the next down barrier aligns at 0.8789 (low May 23) seconded by 0.8784 (200-day SMA) and then 0.8724 (low May 21).

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