EUR/GBP recede from tops, back below 0.9000
|- EUR/GBP comes under downside pressure below 0.9000.
- Carney reiterated risks remain in case of ‘no deal’ Brexit.
- ECB minutes coming up later in the day.
After clinching fresh 6-month tops beyond 0.90 the figure on Wednesday, EUR/GBP has come under selling pressure on the back of the renewed buying interest around the Sterling and the shared currency.
EUR/GBP challenges the 100-hour SMA at 0.8980
The European cross is losing the grip after three consecutive daily advances, including new multi-month tops beyond the psychological 0.9000 handle.
The prevailing downside in the greenback in response to the dovish tone from Chief Powell at his congressional testimony and the FOMC minutes has given extra legs to the euro and the Sterling, motivating the cross to reverse the upside somewhat.
From the BoE’s Financial Stability Report, Governor Carney said risks of economic disruption remain in case of a ‘no deal’ scenario. On another front, the British Pound has practically ignored the recent bout of diplomatic effervescence between President Trump and (now former) UK ambassador to US K.Darroch.
In today’s docket, German final June inflation figures met preliminary readings, showing consumer prices rose 0.3% MoM and 1.6% over the last twelve months. Later in the session, the ECB will publish its minutes from the last gathering.
What to look for around GBP
Rising uncertainty in the UK political scenario and around the Brexit process is expected to keep the Pound under permanent pressure for the time being. In the UK economy, poor results from key fundamentals continue to add to the sour prospects for the economy in the months to come and collaborate further with the bearish view on the currency in the foreseeable future. On another direction, the overall tone from the BoE appears to have shifted towards a more dovish gear, while markets have started to price in the likeliness of a rate cut at some point in Q3/Q4.
EUR/GBP key levels
The cross is receding 0.10% at 0.8985 and a break below 0.8944 (21-day SMA) would expose 0.8872 (low Jun.20) and then 0.8826 (low Jun.5). On the flip side, the next hurdle is located at 0.9010 (monthly high Jul.10) seconded by 0.9062 (low Jan.11) and finally 0.9092 (2019 high Jan.3).
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