Analysts at Westpac are recommending to go long on the EUR/GBP cross at around 0.8790 levels for the target price of 0.8920, while maintaining stop loss of 0.8745.
Key Quotes
“Rationale:
- UK PMI surveys highlighted a renewed loss of momentum due to Brexit uncertainty. Pre-Brexit hoarding in case of a “no-deal” is leaving future activity at risk and employment prospects are deteriorating for the first time in 6 years.
- BoE is highly unlikely to alter policy on Thursday. Of more importance for markets will be the updating of forecasts within the Inflation Report and business intentions from the BoE Agents’ Report.
- The Agents’ Report has great influence within the MPC. Any reflections of the deterioration in PMI’s in the Agents’ Report it is likely to impact the tone of MPC.
- EU publishes its economic forecasts and markets have been discounting downgrades to their GDP outlook, especially for Italy.
- May is likely to face an EU that is resistant to any reopening of the Irish Border Backstop.”
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