EUR/GBP: Further recovery eyes EU data, Brexit news

• EUR/GBP mildly bid ahead of the EU Consumer Confidence.
• EU’s formal announcement of Brexit extension, UK PM’s reaction to the same awaited.

Although pair’s recovery from five-month lows eases short-term buyers’ worries, doubts surrounding the EU fundamentals and Brexit keep the EUR/GBP pair under pressure around 0.8650 while heading into the European session on Wednesday.

With the United Kingdom’s (UK) Parliament’s rejection of the Prime Minister’s (PM) Progress Motion, the pair ignored previous news from the European Council that five of the region’s economies are at risk of breaching fiscal rules.

Also adding to the pair’s recovery was the European Union’s (EU) readiness to allow a three-month extension to the Brexit’s final date of October 31 that was criticized by France and could lead to a snap election in the UK.

While there has been a little information on the political front, markets could wait for the preliminary reading of October month Consumer Confidence data from the Eurozone, expected -6.7 versus -6.5 prior.

On the political front, the EU’s formal announcement of the Brexit extension is still pending, which may reveal any surprises, while the UK PM’s reaction to the same, whether a snap election will be held or not, is eagerly awaited and could keep traders guessing.

Technical Analysis

Only if the pair rises back beyond 0.8785/90, it can avoid the risk of visiting sub-0.8500 area.