EUR/GBP bounces off 2020 lows, around 0.8320by Pablo Piovano
- EUR/GBP rebounds from YTD lows in sub-0.8300 area.
- The sterling gives away some gains following Johnson’s reshuffle.
- German, EMU flash GDP came in below expectations in Q4.
The sterling is correcting lower following the moderate pick-up on Thursday and is helping EUR/GBP to bounce off recent yearly lows in the sub0.8300 region.
EUR/GBP tested fresh 2-month lows
The 4-session negative streak in the European cross appears to have met strong contention in Thursday’s low just below the key support at 0.8300 the figure, area las visited in December 2019.
The upbeat momentum in the quid accelerated on Thursday after UK PM Boris Johnson reshuffled his cabinet and Sajid Javid quit as Chancellor amidst rising rumours pointing to some effervescence between Javid and Johnson’s adviser Dominic Cummings.
In the docket, preliminary GDP figures in Germany and the broader Euroland showed both economies are seen expanding 0.0% QoQ and 0.1% QoQ, respectively, during the October-December 2019 period, both prints coming in below initial estimates.
Later in the session, key US Retail Sales and the flash U-Mich index are expected to add some volatility to the price action in the global assets.
EUR/GBP key levels
The cross is up 0.13% at 0.8318 and faces the next hurdle at 0.8443 (21-day SMA) seconded by 0.8475 (55-day SMA) and then 0.8537 (weekly/monthly high Feb.4). On the flip side, a breach of 0.8295 (2020 low Feb.13) would expose 0.8275 (2019 low Dec.13) and then 0.8248 (monthly low July 2016).