- EUR/GBP loses some ground near 0.8860.
- Upside in the cross emerges at the 0.8900 handle.
- UK political uncertainty, Brexit, keeps weighing on GBP.
The resurgence of the buying interest around the Sterling is collaborating with the decline in EUR/GBP to the 0.8860 region after moving to the boundaries of 0.8890 during early trade.
EUR/GBP focused on Brexit, Payrolls
The European cross is prolonging the choppy activity so far this week, although a test/surpass of multi-month tops in the 0.8900 neighbourhood still remains elusive.
Despite the better tone surrounding the British Pound today, uncertainty in the UK political arena coupled with lack of progress in the Brexit negotiations is expected to remain well in place in for the next months and should be a permanent drag for GBP.
Today, GBP has picked up some attention after the Labour candidate L.Forbes defeated Brexit Party’s candidate M.Green at the Peterborough by-election. It is worth recalling that the Leave option reached 61% at the 2016 referendum.
What to look for around GBP
Heightened uncertainty around the Brexit negotiations and May’s successor keeps the pressure on the Sterling intact for the time being. Back to the UK economy, the recent bounce in the activity in the industrial and manufacturing sectors was exclusively driven by companies stockpiling in case of a ‘hard Brexit’ scenario rather than in response to a more ‘genuine’ recovery in these sectors. Additionally, the current steady stance from the Bank of England appears justified by below-target inflation figures, mixed results from key economic fundamentals and somewhat slowing momentum in wage inflation pressures, all adding to speculations of a ‘no-hike’ this year despite some calls signalling a potential hike in November.
EUR/GBP key levels
The cross is losing 0.23% at 0.8859 and faces the next down barrier at 0.8826 (low Jun.5) seconded by 0.8781 (200-day SMA) and finally 0.8724 (low May 21). On the flip side, a break above 0.8902 (monthly high Jun.4) would expose 0.9062 (low Jan.11) and finally 0.9092 (2019 high Jan.3).
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended content
Editors’ Picks
EUR/USD clings to daily gains above 1.0650
EUR/USD gained traction and turned positive on the day above 1.0650. The improvement seen in risk mood following the earlier flight to safety weighs on the US Dollar ahead of the weekend and helps the pair push higher.
GBP/USD recovers toward 1.2450 after UK Retail Sales data
GBP/USD reversed its direction and advanced to the 1.2450 area after touching a fresh multi-month low below 1.2400 in the Asian session. The positive shift seen in risk mood on easing fears over a deepening Iran-Israel conflict supports the pair.
Gold holds steady at around $2,380 following earlier spike
Gold stabilized near $2,380 after spiking above $2,400 with the immediate reaction to reports of Israel striking Iran. Meanwhile, the pullback seen in the US Treasury bond yields helps XAU/USD hold its ground.
Bitcoin Weekly Forecast: BTC post-halving rally could be partially priced in Premium
Bitcoin price shows no signs of directional bias while it holds above $60,000. The fourth BTC halving is partially priced in, according to Deutsche Bank’s research.
Week ahead – US GDP and BoJ decision on top of next week’s agenda
US GDP, core PCE and PMIs the next tests for the Dollar. Investors await BoJ for guidance about next rate hike. EU and UK PMIs, as well as Australian CPIs also on tap.