EUR/GBP bearish consolidation
The euro is slowly losing stability while the pound is slightly rising, so the EUR/GBP pair is now testing the 0.86000 level. Cautious market sentiment ahead of a key U.S. job report and the rejection of fears of a revolt by central banks, amid a jump in the latest inflation data, play a key role for the overall market.
On Wednesday, ECB President Christine Lagarde was the last to join in views on insufficient inflation control. Monetary policymakers have dismissed any negative implications of the latest rise in the euro area consumer price index while signaling the weaker euro’s expansion of easy money.
German retail sales disappointed markets with a drop of -5.5% versus + 7.7%.
In Great Britain, Prime Minister Boris Johnson and Health Minister Matt Hancock tried to convince the markets that they were optimistic, even though the Indian strain aroused suspicion during the deadline for removing all virus-led locking measures. Further discussions between the EU and the UK over the Northern Ireland protocol continue ahead of key talks over the next week. Recently, the British Minister for Brexit, David Frost, called, according to the Independent, for the heads of Brussels to show more common sense to help find practical solutions.
Given Brexit’s mixed tails, envy, and risk, today’s Europeans and the UK may not be able to satisfy traders with momentum and raise the pair closer to 0.87000.
Looking at the graph on the daily time frame, we see that the EUR/GBP pair oscillates between 0.85500-0.87000. The movement takes place between 61.8-78.6% Fibonacci level. Looking at the moving averages, we can see that they move to the bearish side, directing the pair towards the lower towards 0.85500. The MACD indicator is now of no help to us by moving sideways into neutral territory.