EUR/GBP drops to lows near 0.8880 on BoE, Brexit

The cross comes under pressure on GBP strength.
BoE’s Carney said Brexit ‘no-deal’ would be unusual situation.
BoE’s Haldane noted Brexit could weigh on Q4 GDP.

Pablo Piovano FXStreet

After climbing as high as the 0.8920 region in early trade, EUR/GBP came under renewed pressure and is now testing fresh lows near the 0.8880 region.

EUR/GBP focused on BoE, Brexit

Volatility in the British Pound continues to affect the European cross and is now dragging it to the area of daily lows near 0.8880.

After three consecutive daily advances, the cross is now finding some resistance to advance further north of the 0.8900 handle, always looking to Brexit headlines as the almost exclusive driver of the price action.

Regarding the BoE’s event, Governor M.Carney noted a ‘no-deal’ scenario would be a very unusual situation, adding that the implied volatility around the Sterling remains very high.

In addition, BoE’s Chief Economist A.Haldane, said that uncertainty around a ‘no deal’ is having an impact on businesses, while he expects weaker data in Q4.

EUR/GBP key levels

The cross is now losing 0.31% at 0.8882 and a breach of 0.8868 (low Nov.19) would aim for 0.8834 (200-day SMA) and finally 0.8655 (low Nov.13). On the other hand, the next up barrier is located at 0.8929 (high Nov.19) seconded by 0.8941 (high Oct.31) and then 0.9001 (high Sep.24).

Author

Pablo Piovano

FXStreet

Born and bred in Argentina, Pablo has been carrying on with his passion for FX markets and trading since his first college years.

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