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  • EUR/GBP pushes higher to the 0.89 region.
  • GBP loses further momentum on Brexit, politics.
  • Saunders said the BoE could cut rates in the near term.

Increased selling pressure around the British Pound has given extra wings to EUR/GBP and is now approaching the key barrier at 0.89 the figure.

EUR/GBP focused on Brexit woes, UK politics

The Sterling has regained downside pressure as of late against the backdrop of deteriorating expectations around a Brexit deal and heightened effervescence in the UK political arena.

Adding to GBP-weakness, BoE’s M.Saunders (usually on the hawkish side) hinted at the likeliness that the next move on rates by the BoE would be a cut. He also added that the floor for UK rates is close to zero, stressing that negative rates have negative effects on the banking system and threaten financial stability. Saunders also highlighted that high uncertainty is the most likely outcome for the UK, event on a soft-Brexit scenario.

In the docket, French flash CPI is expected to contract at a monthly 0.3% during September, Italian Consumer Confidence improved a tad this month and the Consumer Confidence in the broader euro area bettered to -6.5 in the same period.

EUR/GBP key levels

The cross is gaining 0.26% at 0.8884 and faces the initial hurdle at 0.8906 (50% Fibo of the May-August rally) seconded by 0.8962 (100-day SMA) and then 0.9030 (55-day SMA). On the flip side, a drop below 0.8785 (monthly low Sep.20) would expose 0.8667 (78.6% Fibo of the May-August rally) and finally 0.8488 (monthly low May 6).