- EUR/GBP gains traction for the second straight day and climbs to a nearly one-month high.
- The ECB’s hawkish outlook continues to underpin the Euro and extends support to the cross.
- The dismal UK Retail Sales data weigh on the British Pound and provide an additional lift.
The EUR/GBP cross is building on the previous day's strong positive move and gaining traction for the second successive day on Friday. The momentum extends through the first half of the European session and lifts spot prices to a nearly one-month high, around the 0.8770 region in the last hour.
A more hawkish stance adopted by the European Central Bank (ECB) on Thursday continues to underpin the shared currency, which turns out to be a key factor acting as a tailwind for the EUR/GBP cross. In fact, the ECB indicated that it will need to raise borrowing costs significantly further to tame inflation, which remains far too high and is projected to stay above the target for too long.
Adding to this, Friday's release of the better-than-expected flash Eurozone PMIs, suggesting that the economic downturn in the region eases in December, offers additional support to the Euro. The British Pound, on the other hand, is pressured by dismal domestic data, showing that Retail Sales fell again in November and fueling concerns that the economy has already entered a prolonged recession.
Apart from the aforementioned fundamental factors, sustained strength beyond a previous strong support breakpoint, around the 0.8700 mark, seems to have prompted some technical buying. any subsequent move up, however, is more likely to confront stiff resistance near the 0.8800-0.8810 supply zone. The latter should act as a pivotal point, which if cleared will be seen as a fresh trigger for bulls.
Technical levels to watch
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
GBP/USD drifts higher ahead of UK election results
GBP/USD extends its sideways grind near 1.2750 in the American session on Thursday. A broadly softer US Dollar keeps the pair afloat but traders refrain from placing fresh bets on the Pound Sterling while awaiting exit polls of UK election.
EUR/USD holds steady near 1.0800 after ECB Accounts
EUR/USD continues to fluctuate in a tight range near 1.0800 in the second half of the day on Thursday. The accounts of the ECB's June policy meeting fail to influence the Euro's valuation as trading conditions remain thin, with US markets remaining closed on Independence Day.
Gold consolidates weekly gains ahead of US NFP
Gold struggles to build on Wednesday's gains and trades in a narrow band above $2,350. Sustained US Dollar weakness alongside sluggish US Treasury bond yields help XAU/USD limit its losses ahead of Friday's key June jobs report from the US.
Crypto Today: Bitcoin crumbles under German government transfers, Ethereum and Ripple erase gains
Bitcoin trades below $57,100 on Thursday as German government transfers continue, $76 million BTC moved to exchanges. Ethereum trades near $3,100 ahead of the upcoming SEC decision on the Spot Ethereum ETF.
Investors await NFP to validate their Fed rate cut bets
Investors expect two rate cuts, even though Fed signals one. Recent data corroborates investors’ take. Nonfarm Payrolls waited for more confirmation.