EUR/GBP retreats from 0.8860, eyes on May

The European cross is losing ground for the second straight session so far on Tuesday, fading yesterday’s spike to tops around 0.8860.

EUR/GBP remains unable to pick up pace after mixed ZEW results showed the Economic Sentiment in both Germany and the euro area have missed expectations for the current month. On the bright side, German Current Conditions have surprised to the upside during the same period.

Adding to GBP strength, inflation figures in the UK saw consumer prices rising more than expected during December, up 1.6% over the last twelve months and 0.5% inter-month.

Both EUR and GBP keeps the bullish note so far today amidst an increasing selling bias around the buck.

At her speech later today, UK’s PM Theresa May is expected to confirm her plans for a ‘clear Brexit’, which include the country withdrawing from the customs union and the single market.

EUR/GBP key levels

The cross is now retreating 0.22% at 0.8782 facing the next support at 0.8645 (100-day sma) ahead of 0.8609 (20-day sma) and then 0.8446 (low Jan.3). On the upside, a break above 0.8860 (high Jan.16) would aim for 0.9055 (high Nov.2) and finally 0.9143 (high Oct.11).