EUR/GBP eyes further recovery amid UK’s political backlash before German data

• EUR/GBP rises to the upper-end of the near-term trading range.
• UK’s political drama weighs on the British Pound (GBP).
• German Consumer Confidence, IFO data in the spotlight.

With the Brexit pessimism keeping the GBP buyers away, EUR/GBP takes the bids to 0.8645 by the press time of the pre-European session on Friday.

The United Kingdom’s (UK) Prime Minister (PM) Boris Johnson finally threw his trump card while announcing a snap election motion, to be voted on Monday. However, it remains to be preceded by the European Union’s (EU) Brexit extension, likely till mid-November amid French resistance.

The pair ignored the European Central Bank’s (ECB) sustained support for easy monetary policy report during the last meeting by Mario Draghi.

Looking forward, Germany’s GfK Consumer Confidence Survey and IFO numbers for October will be the immediate catalysts while Brexit headlines will keep directing price moves in the meantime.

Forecasts suggest a mild improvement in consumer confidence data where TD Securities anticipate consolidation from IFO numbers as it says, “We’re largely on top of consensus for Germany’s IFO survey today, with little movement from the month before. It looks like Germany’s survey data is largely in a consolidation phase after some steep declines over the last several months. At 9am BST we also get the latest data from the ECB’s Survey of Professional Forecasters. Last quarter saw long-term inflation expectations hitting a fresh record low, and  we’re not expecting any substantial improvement  in the Q4 data.”

Technical Analysis

Despite the recovery, the pair needs to provide a sustained break above September month low of 0.8785 in order to restore investor confidence and aim for 0.8900 number to the north. Meanwhile, 0.8570 and 0.8500 will remain on the bear’s radar.