EUR/GBP tumbles to 7-month lows near 0.8550
|- EUR/GBP plummets to multi-month lows near 0.8550.
- GBP picks up pace on N.Farage’s comments.
- UK advanced Q3 GDP came in below estimates.
A bout of buying interest in the Sterling has dragged EUR/GBP to fresh 7-month lows in the vicinity of 0.8550.
EUR/GBP weaker on GBP-buying, politics
The European cross has breached the key support at 0.8600 the figure following increasing upside momentum in the quid, all after N.Farage said the Brexit Party will not contest Conservative seats.
In addition, the Brexit Party’s leader warned against the probability of a second referendum if Tories lose the elections. All in all, investors deem Farage’s move as supportive of PM B.Johnson’s aspirations and thus a positive driver for the pound.
Earlier in the day, the UK docket showed the domestic economy is expected to expand 0.3% QoQ during the July-September period and 1.1% on a yearly basis, both prints coming in short of forecasts.
Further data saw Industrial Production and Manufacturing Production extending the downside momentum and contracting at a monthly 0.3% and 0.4%, respectively, during September.
Additionally, and still in the UK, the trade deficit widened to £12.54 billion also in September (from August’s £10.83 billion deficit).
Later in the week, the ZEW survey in Germany and flash Q3 GDP figures in the broader Euroland will be in the limelight.
EUR/GBP key levels
The cross is losing 0.59% at 0.8569 and a breach of 0.8557 (monthly low Nov.11) would expose 0.8488 (monthly low May 6) and then 0.8474 (2019 low Mar.12). On the other hand, the next hurdle aligns at 0.8676 (high Oct.24) followed by 0.8807 (200-day SMA) and finally 0.8906 (50% Fibo of the May-August rally).
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