EUR/GBP sticks to gains above 0.89, looks to Brexit

  • EUR/GBP is extending the positive streak, still below 0.90.
  • GBP fades the earlier up move on news regarding Irish backstop.
  • Scotland’s Court ruled in favour of B.Johnson.

The Sterling continues to fade the earlier spike and is now supporting another bull run in EUR/GBP to the 0.8985/90 band.

EUR/GBP stays focused on Brexit

The European cross keeps the march north unabated so far on Thursday, although a test/surpass of the critical barrier at 0.89 the figure still remains elusive.

The British Pound has given away initial gains after EU officials discarded news regarding an offer to solve - albeit temporarily - the issue around the key Irish backstop.

In the meantime, the Scottish Court has ruled in favour of UK PM B.Johnson. Now, Johnson is not forced to ask for an extension of Article 50 in case of a no deal by October 19.

In addition, PM B.Johnson suggested MPs to debate the Brexit deal in Parliament on Saturday 19th October, just after the key EU Summit on October 17th-18th.

In the UK calendar, the focus of attention will now be on tomorrow’s release of GDP figures as well as results from Industrial Production and Manufacturing Production.

Later today, the publication of the FOMC minutes is expected to drive the sentiment in the global markets.

What to look for around GBP

Volatility around the Sterling is expected to remain well and sound for the time being amidst alternating Brexit headlines. In the meantime, investors continue to gauge a potential extension of the Brexit deadline (despite B.Johnson’s opposition), a call for early elections and the lack of progress around the Irish backstop, all keeping the ‘no deal’ scenario well on the table. While the negotiation between both parties is expected to continue in the next days, and on another side, BoE’s (former hawk) M.Sunders stressed the likelihood of a rate cut if the UK economic outlook worsens regardless of the Brexit outcome. His view could keep rallies in GBP somewhat limited for the time being and carries the potential to spark a division in the central bank’s ranks, as the ‘Old Lady’ remains reluctant to factor in a probable ‘hard Brexit’ into its projections.

EUR/GBP key levels

The cross is gaining 0.28% at 0.8991 and faces the initial hurdle at 0.9004 (38.2% Fibo of the May-August rally) seconded by 0.9020 (55-day SMA) and finally 0.9127 (23.6% Fibo of the May-August rally). On the flip side, a drop below 0.8882 (21-day SMA) would expose 0.8829 (200-day SMA) and then 0.8785 (monthly low Sep.20).

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: Bullish case underpinned by weekend news

The EUR/USD pair has rallied Friday to close with gains for a third consecutive week at 1.1169. There was no particular catalyst for EUR gains. ECB scheduled to meet this week, although no fireworks expected this time.


GBP/USD: Uncertainty or relief? Action granted anyway

Hopes that the UK will avoid a hard-Brexit kept the Pound rallying against all of its major rivals by the end of last week, with GBP/USD finishing it a handful of pips below the critical 1.3000 level.


USD/JPY: Corrective slide to continue on sentiment

The USD/JPY pair closed the week at around 108.40, down Friday for a third consecutive day as the American currency remained under selling pressure. USD/JPY at risk of falling further only if it breaks below 108.00.


Gold turns flat above $1,490 as USD remains under pressure

After dropping to a daily low of $1,485, the XAU/USD pair staged a modest rebound during the American trading hours and turned flat on the day near $1,492.

Gold News

China’s downward economic path offers no escape from its trade problems

There were no surprises in China’s GDP figures as the government portrays an economy slipping steadily lower giving little promise of improvement or support for the waning global expansion.

Read more