- Doubts over the economic strength, expectations of a dovish ECB statement drag EUR/GBP down.
- The bloc leaders are worried as Brexit hardliner, Boris Johnson, becomes the UK PM.
- EU/German PMIs and developments surrounding Brexit, be it at Britain or EU, will offer fresh impulse.
While increasing odds of the ECB’s dovish appearance on Thursday fetch the EUR/GBP pair beneath 21-DMA ahead of Wednesday’s European session, investors await political drama concerning Brexit and PMI data from Germany/Eurozone for fresh impulse.
The Brexit hardliner, Boris Johnson, yesterday became the UK’s Prime Minister gaining 2/3 of total Tory vote bank. His first speech included the favorite phrase of “Brexit on October 31″.
As a result, the bloc leaders agreed to hold an emergency Parliament meeting on Wednesday to discuss how to tackle the Brexit issue with Boris Johnson’s team.
Not only EU lawmakers but several UK politicians were also uncomfortable with PM Johnson’s victory and announced resignations before/after the result.
In addition to the EU Parliament meeting and announcements concerning the Boris Johnson’s team, monthly details of Preliminary Purchasing Managers’ Index (PMI) will also entertain investors and provide clues for tomorrow’s European Central Bank (ECB) meeting.
Technical Analysis
While 21-day moving average (DMA) level of 0.8977 confines the pair’s upside towards 0.9015 and 0.9055 and downside break of 0.8955 can confirm short-term head-and-shoulders formation on 4-hour chart, which in turn opens the gate for the quote’s slump to 0.8857 figure as per the measured move method.
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