- The cross extends the move higher to 0.8600 and above.
- Speculations on May’s resignation keep running high.
- Key UK Q1 GDP releases due tomorrow.
The offered bias around the Sterling remains well and sound in the second half of the week and keeps sustaining the up move in EUR/GBP, this time to fresh tops above 0.8600 the figure.
EUR/GBP looks to Brexit, trade
The European cross is posting gains since Monday, advancing nearly 1.6% since lows in sub-0.8500 levels to today’s peaks in the 0.8620 region.
Rising concerns on the US-China trade front continue to rule the sentiment in the global markets and particularly around the risk-associated universe.
Around Brexit, calls for PM Theresa May to quit have been increasing as of late, bringing in further uncertainty and sponsoring the ongoing leg lower in the British Pound.
What to look for around GBP
Market participants have shifted their focus to the resumption of cross-party talks between the government and the opposition, although there is no significant progress yet. In the calendar, attention has shifted to the upcoming key releases at the end of the week, with the GDP in centre stage. Latest data releases from the industrial sector and PMI, albeit auspicious, were exclusively driven by companies stockpiling in case of a ‘hard Brexit’ outcome although failed to allay concerns over the prospects on the UK economy and the currency in the longer run. In addition, 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 already rising speculations of a ‘no-hike’ this year.
EUR/GBP key levels
The cross is gaining 0.14% at 0.8615 and a break above 0.8620 (high May 9) would expose 0.8681 (high Apr.23) and finally 0.8722 (high Mar.21). On the other hand, the next support lines up at 0.8488 (low May 6) followed by 0.8483 (low Mar 27) and then 0.8471 (2019 low Mar.13).
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