EUR/GBP stays below 0.9055/60 with all eyes on German consumer confidence, Brexit talks

Following its break of 0.9060/55 key support (now resistance), EUR/GBP remains on the back for while taking rounds to 0.9030 ahead of the European session on Wednesday.

Sluggish prints of German gross domestic product (GDP) and uncertainty surrounding Italy’s political future amid coalition talks dragged the regional currency Euro (EUR) down on Tuesday. On the contrary, the UK’s cross-party members’ pledge to stop no-deal Brexit triggered the British Pound’s (GBP) run-up.

At Wednesday’s dawn, leader of Italy's 5-Star Movement party Di Maio crossed wires while saying that Five Star will respect members’ online vote for making the decision on the new government proposal during the next week. In case of Britain, the cancellation of a spending plan announcement by the UK Finance Minister’s office sparked concerns of a snap election and curbed the GBP’s previous advances. However, the pair still becomes dearer to bears on the back of technical breakdown.

Moving on, Germany’s GfK Consumer Confidence Survey results for September will grab immediate attention of market players after the recent slew of disappointing data from Europe’s largest economy. Forecasts suggest 9.6 mark against 9.7 prior. On the other hand, the UK Prime Minister (PM) Boris Johnson’s Chief Brexit Adviser David Frost will travel to Brussels on Wednesday. The motto of the visit is to push the regional leaders towards revoking Irish backstop with alternative solutions that they have been denying so far.

Technical Analysis

Unless the prices grow back beyond 0.9060 including 50-day simple moving average (DMA) and 16-week old rising trend-line, 0.8960 and late-July low near 0.8890 can keep flashing on sellers’ radar.