EUR/GBP bulls stepping on the gas again towards key resistance, expected to cap

• EUR/GBP extends upside territories as GBP continues to bleed out. 
• EUR/GBP bulls seeking a test of 0.8571/.8600 key resistance. 

Sterling continued to be battered by evolving Brexit headlines. Despite clawing back some ground early in the session – largely due to a less-dovish BoE – a softer-than-expected retail sales print saw the currency slip back into the red.

Also, the pound tumbled on Thursday as the queen set out Prime Minister Boris Johnson’s legislative plans, prioritizing Brexit. However, the contents of the speech were mostly as expected and had been priced in by markets following the news that PM Johnson was adamant that there will be no transitionary period extension beyond December 2020. 

BoE leaves policy unchanged

The Bank of England left its policy stance unchanged, as wildly expected, indicating that it is waiting to see how the economy will evolve now that the election is out of the way, and to the extent of fiscal support. However, it was warned that the BoE could cut rates, mostly depending on Brexit risks. 

As for UK retail sales, for November, these came in much softer than expected at -0.6% m/m (+0.2% expected). "However, consumers may have deferred spending ahead of Black Friday sales," analysts at ANZ bank explained. 

EUR/GBP levels 

EUR/GBP has swiftly taken out the mid-November low at 0.8522 and bull s now have their eyes set on a key resistance area where analysts at Commerzbank noted being located at the October low, November 22 high and the 55-day moving average which can be spotted at 0.8571/.8600 – "This area we expect to cap, if reached."

"Support below the December 9 low at 0.8393 comes in at the 0.8239 current December trough. Below it remain the June and October 2012 highs as well as the April 2016 high and the January and February 2014 lows at 0.8167/18."