EUR/GBP: a key week for the UK and sterling traders, 0.90 in tact still

Currently, EUR/GBP is trading at 0.9037, down -0.10% on the day, having posted a daily high at 0.9059 and low at 0.9009.

EUR/GBP is in a choppy recovery and consolidation above 0.90 the figure within the broader and bullish trend. Analysts at ING explained that the widening interest-rate differentials lend support to a higher EUR/GBP. 

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"We prefer to see the recent move as an "overshoot" rather than a broader trend towards parity; risks that over exuberant EUR markets are front-running ECB QE tapering, as well as fading cliff-edge Brexit risks, limit the scope to which EUR/GBP can move materially beyond 0.90. Domestic and geopolitical uncertainties may see us trade in the 0.9000-0.9150 range in the near-term, with greater risks of a downside breakout," argued the analysts. 

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Meanwhile, on the data front, this week will be a crucial week for sterling traders. We have three major events in CPI, labour market and retails sales report. Markets are also keeping an ear to the ground after the media reported that the UK government is set to release position papers on key Brexit issues in the next few weeks. 

EUR/GBP levels

Technically, EUR/GBP is showing signs of rejection at the 0.9085 2011 high, noted analysts at Commerzbank, adding, "EUR/GBP has tested but not closed above the 0.9082/85 2011 high. The new high has been accompanied by a divergence of the daily RSI and attention has reverted to the 0.8980 near term uptrend and the .8871 channel. The up-move remains intact above here. Above 0.9088 introduces scope to the 0.9170 78.6% retracement."