EUR/GBP pushes higher near 0.8850 on GBP-selling

  • EUR/GBP keeps the rally well and sound above the 0.88 handle.
  • The sell-off in the Sterling remains the exclusive driver behind the drop.
  • Uncertainty around May’s government keeps gathering pace.

The bearish note around the British Pound has given extra wings to EUR/GBP, which managed to clinch fresh tops near 0.8850 earlier in the session.

EUR/GBP focused on Brexit woes

The European cross is prolonging its impressive rally so far today, already gaining more than 4% since early month lows in sub-0.8500 levels and advancing for 14 straight sessions, including the break above the critical 200-day SMA.

As usual the increasing selling bias around the Sterling has been fuelled by uncertainty around the UK government, where it seems the days in Number 10 would be numbered for PM Theresa May.

Fanning the flames, Commons Leader A.Leadsom has stepped down yesterday in clear opposition to May’s Brexit plans and a potential fourth vote at the House of Commons in early June.

What to look for around GBP

Heightened uncertainty around the Brexit negotiations and May’s government has intensified in past hours, forcing the Sterling to shed further ground. Investors’ focus now seems to have shifted to the likeliness of further resignations by MPs, which could accelerate the departure of PM May. On another direction and back to the UK economy, recent publications from the industrial sector somewhat confirmed the rebound seen in the previous months, although the bounce in activity was exclusively driven by companies stockpiling in case of a ‘hard Brexit’ scenario rather than in response to a more ‘genuine’ recovery in the sector. Further out, 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 gaining 0.09% at 0.8809 and a break above 0.8840 (monthly high Feb.14) would expose 0.9062 (low Jan.11) and finally 0.9092 (2019 high Jan.3). On the downside, initial contention aligns at 0.8742 (high May 21) seconded by 0.8680 (100-day SMA) and then 0.8620 (55-day SMA).

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.

Feed news

Latest Forex News

Editors’ Picks

EUR/USD retreats on the hawkish Fed cut

EUR/USD is trading closer to 1.10 after the Fed cut rates but signaled no further rate reductions. The bank acknowledged the strong labor market and robust consumption. However, it is worried about investment.


GBP/USD: Rising wedge at the top inflates downside risk

GBP/USD portrays a short-term rising wedge bearish formation while trading near 1.2475 during the Asian session on Thursday. One-week-old rising wedge surrounding monthly tops questions buyers.


USD/JPY pops 20 pips on the as expected Fed

USD/JPY is currently trading at 108.32 following the FOMC, travelling between 108.08 and 108.33 but is virtually flat on the day as the Fed lowered rats as expected by 25 basis points.


Gold drops on strength in the Greenback following a dubious Fed rate cut

Gold prices have dropped on the Federal Reserve decision whereby no real assurance of more cuts down the line were presented. However, the door has been left open which limits the downside potential in this move.

Gold News

Australian Employment Preview: The Fed and then the RBA

Higher unemployment could set the stage for RBA cuts. Employment is expected to increase by 10,000 in August after July’s addition of 41,100. Federal Reserve rate decision and economic projections in the background

Read more