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Pullback Considered Corrective


Holding Above Recent Lows


BLOCK, Large 3Y Midcurve Put Condor

Breaks Support at Gbp0.8970

MNI (London)

Sterling demand seen through Thursday's 1600BST fix provided the impetus for EUR/GBP to break below Gbp0.9000, with ensuing sales extending the move to allow for a challenge on next support at Gbp0.8970. Recovery efforts were capped at Gbp0.8980 through Asia with fresh sterling demand providing the added weight to ease rate below Gbp0.8970 into Europe. Further sales have taken rate down to Gbp0.8960 with recovery efforts so far holding shallow. Expect some support between Gbp0.8955/45 ahead of stronger level at Gbp0.8938. Move also sees rate extend away from its key technical 10-dma, currently at Gbp0.9015, with the base of its 1.0% 10-dma envelope currently seen at Gbp0.8925. Retail Sales data from the UK was seen stronger then forecast. Some positive noises from the EU/UK Brexit meeting, though with caveats on fishing, providing some of the support for sterling. UK flash PMI set due for release at 0930BST, the Services component in view(median 57.0).

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