EUR/GBP deflates from daily highs, back below 0.8800

After climbing as high as the 0.8860 area, EUR/GBP has now met fresh sellers and has retreated below the key support at 0.8800 the figure.

EUR/GBP attention to UK politics

The European cross quickly leapt to fresh tops near 0.8860, just pips away from yearly highs seen in early January in response to the sell off that hit the Sterling in the wake of UK general elections.

In spite of losing some upside momentum, the cross stays bid as the Sterling remains under pressure with investors’ attention now shifting to the speech by UK’s PM Theresa May.

It is worth mentioning that May has already ruled out stepping down following the results, while latest news cited May has clinched a deal with DUP (Democratic Unionist Party) in order to form a minority government.

Data wise in the UK, both industrial production and manufacturing production have come in below expectations for the month of April, while the trade deficit shrunk more than expected during the same period.

Absent further releases from both sides of the Channel, headlines from the political scenario in the UK should drive the sentiment ahead in the day.

EUR/GBP key levels

The cross is now up 0.49% at 0.8774 facing the next up barrier at 0.8859 (high Jun.9) seconded by 0.8860 (2017 high Jan.16) and finally 0.9055 (high Nov.2 2016). On the downside, a drop below 0.8745 (low Jun.9) would expose 0.8667 (20-day sma) and then 0.8646 (low Jun.8).