EUR/GBP: bears back in control, looking for a test below 0.89 handle

• EUR/GBP: bulls lose contols and sight of the 0.90 handle
• EUR/GBP: the resergunce in the dollar and option expiry triggered a bid on the pound.

EUR/GBP has dropped on Thursday after The Sun reported that UK PM May was preparing to raise the Brexit divorce bill offer and UK retail sales data beat at +0.3% vs +0.1% f/c lifted the spirits around the UK economy.  "The data give some credence to concerns that rising inflation is pinching UK consumers amid low real wage growth. UK parliamentary discussions of the Brexit Bill continue amid signs of divisions in PM May’s Conservative party, meanwhile. All things considered, we are not inclined to look favourably on the GBP at the moment," argued analysts at Scotiabank. Currently, EUR/GBP is trading at 0.8920, down -0.39% on the day, having posted a daily high at 0.8970 and low at 0.8912.

In the European session, large option expiry interest on EURUSD above 1.1800 pushed EURGBP lower 0.8912 which was an additional prop to the pound from 1.3135 lows to space on the 1.32 handle. Carney has been speaking but nothing new from him talking at the Future Forum panel:

"Whatever happens on Brexit, the BOE will be nimble enough to control inflation while supporting the economy."

EUR/GBP levels

Bulls were pushing for a test of the 0.90 handle where a score above 0.9034 would open the 61.8% Fibonacci retracement at 0.9093 ahead of that mid-August high at 0.9145. 0.9306 is the 28th Aug and year 2017 high. However, the tides have gone out ad sterling playing catch up, with a slide to a test of the bull's commitments down at 0.8910 ahead of , 0.8880 where the 21-D SMA is now located and 0.88 the figure marks the support of 6th Nov. Below there, 0.8723 (the 55-week ma) guards a run towards 0.8530 being the 78.6% retracement of the 2017 trend.