EUR/GBP rebounds to the 0.8950 region, focus stays on politics, Brexit

  • EUR/GBP reverses the recent downside and retakes 0.8950.
  • Scottish Court ruled that the suspension of Parliament was unlawful.
  • Uncertainty and the still likeliness of a ‘no deal’ weighs on GBP.

The now better tone around the shared currency is lifting EUR/GBP back to the mid-0.8900s, reversing at the same time three consecutive daily declines.

EUR/GBP attention remains on UK politics

The European cross has so far managed to keep the trade above the critical support at 0.89 the figure amidst rangebound trading prevailing around EUR and some weakness surrounding the Sterling.

Back to the UK political arena, the so-called ‘Yellowhammer’ contingency plan has been published by the government, outlining several worst-case scenarios in case of a hard UK-EU divorce at the end of October. The document highlights the probable occurrence of riots, increase in food prices and shortage of medical supplies, among others. Following the release of the ‘Yellowhammer’ document, Labour leader J.Corbyn urged the government to recall the Parliament.

In the meantime, a Scottish Court ruled on Wednesday that the recent suspension of the UK Parliament was unlawful.

Data wise, nothing in the UK after Wednesday’s auspicious labour market report. On this side of the Channel, German final CPI figures for the month of August fell in line with the preliminary readings, showing consumer prices contracted 0.2% inter-month and rose 1.4% YoY. Additional data saw Industrial Production in the broader euro area contracting 0.4% MoM during July and 2.0% from a year earlier, both prints coming in short of estimates.

What to look for around GBP

Some selling bias emerged around the British Pound and triggered a mild correction lower following recent positive results in the UK docket. However, the Sterling is forecasted to remain under scrutiny as political effervescence is far from abated... and a Brexit deal looks still ages away from resolving. All eyes are now on the developments from the UK political arena amidst the parliamentary inactivity and with all the looks pointing to mid-October, when the UK Parliament is due to re-open its doors and the Queen is expected to give her Speech. On another direction, BoE’s Vlieghe recently ruled out negative interest rates and talked down the likeliness of a recession in the country. Recent results appear to support his comments.

EUR/GBP key levels

The cross is gaining 0.22% at 0.8949 and faces the next resistance at 0.9054 (55-day SMA) followed by 0.9148 (monthly high Sep.3) and then 0.9324 (2019 high Aug.12). On the other hand, a drop below 0.8904 (monthly low Sep.9) would expose 0.8891(monthly low Jul.25) and then 0.8840 (200-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 extends its decline amid upbeat US consumer confidence

EUR/USD is extending its falls toward 1.1050 after US Consumer Sentiment beat expectations with 92 points. Earlier, retail sales met expectations. 


GBP/USD rises above 1.24 as Brexit uncertainty prevails

GBP/USD hits a 6-week high above 1.24. The DUP dismissed reports that it would accept special treatment for the province as a solution to the backstop. The EU is ready to grant a Brexit extension as Johnson faces growing criticism.


USD/JPY: holding in higher ground ahead of US Retail Sales

Risk appetite dominates the financial world, weighing on safe-haven assets. US Retail Sales and the preliminary Michigan Consumer Sentiment Index up next. USD/JPY bullish case prevails, 107.45 critical Fibonacci support.


Gold remains on track to end week below $1,500

The troy ounce of the precious metal rose above $1,500 but failed to preserve its strength as the upbeat market sentiment made it difficult for the safe-haven gold to find demand. 

Gold News

The good, the bad and the extremely ugly crypto

XRP is in a borderline situation and with little room for doubt. Bitcoin demonstrates its power and positions itself as the emerging leader. Ethereum is in an intermediate situation, far from risk but also from opportunity.

Read more