Currently, EUR/GBP is trading at 0.8758, down -0.03% on the day, having posted a daily high at 0.8783 and low at 0.8734.
EUR/GBP rallied in London with the price recovering almost 100% of the Asian sell-off, extending gains when NY got underway. Sterling took a hit on the news that the LSE Professor Silvana Tenreyro, a dove, was appointed. Sterling has been buoyed by higher than expected CPI and prospects of a rate hike with the hawkish BoE vote a surprise. However, many analysts do not expect a rate hike so soon.
This week could be a volatile week for the cross given that Brexit negotiations will take place and we will have the Queen’s speech on Wednesday that will include the UK government’s legislative process for Brexit. June 22-23rd, EU leaders will meet in Brussels.
Analysts at Commerzbank explained that the cross is currently holding the near term uptrend at 0.8719. “It continues to probe the 0.8852 January high, and will need to close above here to confirm further upside potential to 0.8987/.9059, the 61.8% retracement and the highs from mid October. Technically we have little to suggest that the market will sustain a move above this high, which is reinforced by the 0.8858 50% retracement of the move down from the 0.9403 spike high, but the market will stay bid above the .8707 short term uptrend.”