EUR/GBP retreats from 13-day top ahead of UK-German talks, ECB’s Lagarde

• EUR/GBP consolidates the heaviest gains in a week amid market’s indecision.
• UK’s Labour Party surprises politics with a by-election victory in Northern England.
• ECB’s Weidman pushed for tapering, Lagarde eyed before next week’s surprise meeting.
• Germany’s Merkel will visit UK, EU’s travel ban is the key.

EUR/GBP sellers flirt with the 0.8600 threshold, down 0.07% intraday, heading into Friday’s London open. The cross-currency pair jumped to the highest since mid-June the previous day before stepping back from 0.8615.

In doing so, the quote consolidates recent gains amid the market’s cautious mood before the key data/events. Among them, German Chancellor Angela Merkel’s visit to the UK and speech from the ECB President Christine Lagarde becomes crucial.

With the yearly top of the coronavirus (COVID-19) cases in the UK, Germany pushed for the European Union’s (EU) ban on British travellers irrespective of their jabbing status. The same highlights today’s London-Berlin meet in Britain as Merkel may aim to keep her good ties with British politics during her final days as the most powerful woman in the bloc.

Also on the political side was the news from Reuters saying, “British Labour leader Keir Starmer received a boost in northern England on Friday, fighting off a challenge from the governing Conservatives to hang on to a parliamentary seat that if lost, would have heaped pressure on him to stand down.”

Additionally, the comments from European Central Bank (ECB) Governing Council member and Bundesbank President Jens Weidman, suggesting a German push for tapering, also weigh on the EUR/GBP prices, On the contrary, BOE Governor Andrew Bailey stepped back from his previous bullish bias on inflation on Thursday and restored confidence for easy money policy.

Above all, the market’s sluggish sentiment ahead of the key US jobs report, Merkel’s UK visit and speech from the ECB’s Lagarde seem to restrict EUR/GBP moves.

Technical analysis

50-DMA probes two-month-old resistance breakout, now support, but bullish MACD and firmer Momentum line favor EUR/GBP buyers.