EUR/GBP challenges 6-month peaks just below 0.9000

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  • EUR/GBP loses upside traction just below 0.9000.
  • Stronger USD weighs on euro and the British Pound.
  • Uncertainty in UK politics keeps weighing on the Sterling.

EUR/GBP keeps trading in the upper end of the recent range, although a test/surpass of the critical 0.9000 the figure still remains elusive.

EUR/GBP focused on Powell, FOMC

The European cross remains below the key hurdle at the 0.9000 mark for the time being following the increased selling mood surrounding the Sterling and the shared currency.

In fact, the prospects of extra monetary stimulus by the ECB in the near term in response to the ongoing economic slowdown and lack of traction in inflation in Euroland keep the offered stance unchanged in EUR.

On the GBP-side, uncertainty around UK politics remains the name of the game across the Channel, along with the absence of fresh and significant developments on the Brexit front.

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 for the time being. 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 0.32% at 0.8985 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 0.8935 (21-day SMA) seconded by 0.8872 (low Jun.20) and then 0.8826 (low Jun.5).

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