EUR/GBP on the bids near 0.8810 as EU election adds into Brexit uncertainty
- Rise of Brexit party adds uncertainty into the already lagging Brexit process.
- EU can withstand the rise of eurosceptics till Germany holds the gate.
With the results of EU parliament elections start rolling out, the EUR/GBP pair is taking the bids near 0.8810 in the initial hours of the Asian session on Monday.
At the EU, the rise of Euroskeptics was questioned as ruling parties’ loss at Greece and Italy confronts status quo at Germany.
On the other hand, Nigel Farage’s six-week-old Brexit party gains an upper hand at the UK while ruling Tories are likely to getting the last seat to watch due to their perceived failure to handle Brexit.
While no major change is likely to take place at the EU’s political system, the UK might have to suffer if Brexit party comes into power as it favors clear distance from the EU and stands ready to raise questions on previous Brexit handling.
The British Pound (GBP) recently gained after the PM Theresa May announced her resignation for June 06 with ex-Foreign Minister Boris Johnson likely leading the race of Tory candidates to replace Mrs. May.
Technical Analysis
Even if overbought levels of 14-day relative strength index (RSI) signal pullback, 200-day simple moving average (SMA) at 0.8790 may question the pair’s immediate declines, if not then 0.8760 and March month high around 0.8725 may flash on the bears’ screens.
Alternatively, a successful break of the latest high surrounding 0.8855 can propel the quote further up towards December 25 bottom near 0.8900.
Author
Anil Panchal
FXStreet
Anil Panchal has nearly 15 years of experience in tracking financial markets. With a keen interest in macroeconomics, Anil aptly tracks global news/updates and stays well-informed about the global financial moves and their implications.
