- EUR/GBP stops two days of declines ahead of the key Parliament drama in the UK.
- PM Johnson using all he can to call the snap election but the opposition also uses firepower.
- Data docket remains light while trade headlines keep the risk tone intact.
Uncertainty surrounding the UK’s Prime Minister (PM) Boris Johnson’s snap election motion, considering the recent failures in the Parliament, helps the EUR/GBP pair as it recovers to 0.8630 amid pre-European session trading on Tuesday.
The pair has been under pressure as the odds of a no-deal Brexit seems to have been downed ever since the European Union (EU) stretched Brexit deal to December 2020. However, the British PM’s repeated failures to let his pre-Christmas election motion pass through the House of Commons seem to favor the pair off-late.
In an attempt to avoid another humiliation, the Tory leader is now considering to scale back the election date from December 12 to around 09 or 10, as per The Sun, while also introducing the rule to win the support for the motion with a simple majority.
Also increasing the odds of the motion’s success is the House leader Jacob Rees-Mogg’s announcement that the Withdrawal Agreement Bill (WAB) will not return to the house and another attempt to clear the election bill and push it through all the stages.
However, the opposition holds tightly against the Tories. Not only Labour but Liberal Democrats (LibDems) and the Scottish National Party (SNP) are also not impressed with the United Kingdom’s leader.
Elsewhere, optimism surrounding the US-China trade deal in November keep the markets’ risk-tone lighter.
Technical Analysis
With the prices trading below key Simple Moving Averages (SMA), medium-term bias remains bearish. However, sellers will look for a clear break of 0.8570 to aim for 0.8500 and May month low near 0.8490. On the flip side, buyers will stay away unless prices cross September month bottom close to 0.8786 on a daily closing basis.
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