EUR/GBP plummets below 0.8500 on UK Retail Sales, Eurozone Consumer Confidence eyed

• EUR/GBP renews intraday low on strong UK Retail Sales for April.
• UK Retail Sales grew past -0.2% MoM forecasts to 1.4% the last month.
• US dollar weakness, mildly positive sentiment underpin bullish bias.
• Preliminary Consumer Confidence for May, Brexit news can entertain intraday traders.

EUR/GBP takes offers to refresh intraday low around 0.8480 after the UK’s Retail Sales for April surprised markets with strong details during early Friday. Even so, the pair sellers remain cautious as broad US dollar weakness favors strong Euro ahead of the preliminary readings of April month’s Consumer Confidence for the Eurozone.

That said, the UK’s Retail Sales rose past -0.2% MoM expected to 1.4%, versus upwardly revised -1.2% prior. The Retail Sales ex-Fuel also rejected the downbeat bias by rising with 1.4% MoM growth compared to -0.2% expected and -0.9% previous readouts (revised).

Also read: UK Retail Sales rebound 1.4% MoM in April vs. -0.2% expected

It’s worth noting that the lack of major disappointment from the UK data contributing heavily to the British GDP keeps EUR/GBP sellers hopeful.

However, the US dollar weakness and the recent chatters surrounding the European Central Bank’s (ECB) July rate hike probe the pair’s further downside. On the same line could be the latest Brexit jitters as the UK refrains from stepping back after announcing readiness to change Northern Ireland Protocol (NIP) whereas the European Union (EU) braces for punitive measures if Britain alters NIP.

That said, the market’s cautious optimism could be witnessed through softer US Treasury yield and upbeat stock futures, which in turn weigh on the US dollar.

Looking forward, EUR/GBP traders should wait for the Consumer Confidence figures, expected at -21.5 versus -22.2 prior, for fresh impulse.

Technical analysis

The previous support line from mid-April and the 10-DMA, respectively around 0.8500 and 0.8510 respectively, limit the short-term upside of the EUR/GBP prices. Alternatively, the 21-DMA level of 0.8445 restricts further downside of the cross-currency pair.