EUR/GBP hits fresh highs above 0.9100 as Pound remains under pressure

Weaker-than-expected UK data and politics pushed the Pound to the downside across the board. The currency is among the worst performers on Monday. EUR/GBP climbed to 0.9108, reaching the highest level since Wednesday. 

Elections in the UK?

Too many rumors and speculations are hitting the wires at the moment regarding UK politics. Among the most relevant, it was reported that legislation would be put to vote on Tuesdays, pushing UK PM Johnson to seek an extension to Brexit. The Sun published the PM could call for snap elections as early as Wednesday. 

Early elections appear more likely but is it not clear. Tomorrow would be a key day and volatility around Pound’s crosses will likely remain elevated. 

Today also UK data hit the Pound. The IHS Markit/ Chartered Institute of Procurement & Supply (CIPS) released its preliminary report for August and showed the manufacturing index contracted more than expected to 47.4, the lowest in 85 months. 

Levels to watch 

As of writing, EUR/GBP stands at 0.9090, up 55 pips for the day. Despite the rally, the pair continues to trade into the recent range between 0.9100 and 0.9015. If the Euro manages to break and hold on top of 0.9100, it would clear the way to more gains. The next resistance is seen around 0.9170. 

If the pair continues to be unable to break and consolidate on top of 0.9100, a correction seems likely. The immediate support lies at 0.9050 followed by the short-term critical support of 0.9015.