Forex: EUR/GBP upside stalled by 0.8575 after debt auctions

FXstreet.com (Barcelona) - The EUR/GBP keeps on moving higher, now also due to this morning’s Spanish and French 10-year bond auction results. The cross is now being stalled near 0.8575, up by +0.25%.

Spain had its 3, 5 and 10-year debt being sold at 3.257% (from 3.598%), 2.792% (from 3.019%) and 4.612% (from 4.898%), respectively, raising a total of €4.71B. In France, 2 and 5 year bills totaled an amount of €7.911B, with yields at 0.24% and 0.73%, respectively.

Earlier, the UK retail sales report indicated a monthly contraction by -0.7% in March (annualized drop from 2.5% to -0.5%), higher than the -0.8% expected. Excluding fuel, the monthly fall was of -0.8% (consensus of -0.5%) and the annualized figure eased from 3.2% to 0.4% (consensus of 0.9%).

“We remain unconvinced that the market is ready to resume its up move longer term and suspect the 0.8361/65 (cloud+Fibo resistance) will curb the topside for a slide back to the 0.8478 short term uptrend and the base of the cloud at 0.8450”, wrote Commerzbank analyst Karen Jones, adding that a break above 0.8665 would “force us to neutralize our view and allow for another leg up to the 0.8814/15 February high.