EUR/GBP deflates from tops near 0.8880

• The European cross clinched fresh tops in the 0.8880 area.
• EUR-weakness behind the current correction from peaks.
• Brexit concerns keep weighing on GBP ahead of May speech (Friday).

The softer tone in the single currency in combination with some steadiness around the Sterling are collaborating with the ongoing correction lower in EUR/GBP to the mid-0.8800s for the time being.

EUR/GBP focused on Powell, May, Carney

After climbing as high as the boundaries of the 0.8880 area in early trade, the European cross met some GBP buyers and receded to the current 0.8850 zone, where converges the 100-day sma.

The current dip in the cross finds its reason on a steady performance from the British Pound, which is looking to grab some oxygen in light of the recent sharp drop on renewed Brexit woes.

On the EUR-side, markets ignored auspicious final manufacturing PMIs for the month of January amidst a depressed demand, mainly via a strong rally in the buck.

Looking ahead, GBP will look to Friday’s speeches by UK’s PM Theresa May and BoE’s Mark Carney for very near term direction, while in the immediate horizon the second testimony by Fed’s Jerome Powell and key US data should rule the markets’ sentiment later in the NA session.

EUR/GBP key levels

The cross is now losing 0.07% at 0.8855 facing the next up barrier at 0.8878 (high Mar.1) seconded by 0.8911 (high Feb.6) and then 0.8922 (high Feb.14). On the other hand, a breach of 0.8830 (10-day sma) would expose 0.8770 (low Feb.26) and finally 0.8732 (low Feb.8).