- EUR/GBP trades on a better mood and approaches 0.9000.
- GBP remains on the defensive on UK, Brexit uncertainty.
- UK Services PMI dropped to 50.2 in June.
The continuation of the downbeat momentum around the Sterling is propping up the up move in EUR/GBP to the boundaries of the psychological 0.90 the figure.
EUR/GBP boosted by GBP-selling
The European cross is up for the second session in a row on Wednesday, prolonging the rebound from weekly lows in the 0.8920 region, where sits the key 21-day SMA.
The rally in the cross remains unabated and always on the back of rising uncertainty around the Brexit negotiations and UK politics.
In today’s docket, UK services PMI dropped to 50.2 during last month, adding to the recent weak prints from the Construction and Manufacturing PMIs and all rendering in extra selling pressure on GBP.
Nothing new on the Brexit front while on the domestic political front Theresa May warned PM candidates that leaving the EU without a deal threatens the future of the country. This view is particularly reinforced in case former London mayor Boris Johnson becomes the next Prime Minister.
What to look for around GBP
Rising uncertainty in the UK political scenario and around the Brexit process is expected to keep the Pound under permanent pressure, while bouts of USD-selling remains the sole driver behind sporadic bullish attempts in Cable. In the UK economy, poor results from key fundamentals continue to add to the sour prospects for the economy in the months to come and collaborate further with the selling mood around the currency. On another direction, the overall tone from the BoE appears to have shifted towards a more neutral (dovish?) gear, while uncertainty around Brexit is seen as the main obstacle in determining the next move on rates.
EUR/GBP key levels
The cross is gaining 0.25% at 0.8982 and a break above 0.8992 (monthly high Jun.17) would expose 0.9062 (low Jan.11) and finally 0.9092 (2019 high Jan.3). On the other hand, the next down barrier aligns at 0.8920 (21-day SMA) seconded by 0.8872 (low Jun.20) and then 0.8826 (low Jun.5).
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