- EUR/GBP alternates gains with losses near 0.8900.
- German final May CPI matched the preliminary readings.
- ‘No deal’ option remains on the cards after MPs vote.
The offered bias around both the Sterling and the single currency is leaving EUR/GBP so far unchanged for the day in the 0.8900 neighbourhood.
EUR/GBP focused on Brexit, trade
The broad-based sideline theme in the global markets has taken the European cross to the area of 5-month tops around 0.8900 the figure amidst rising uncertainty in the UK politics and and a deteriorated scenario around the Brexit negotiations.
In fact, MPs have rejected on Wednesday the motion put forward by the Labour Party aiming to take control of the Parliament’s timetable with the intention to avoid a UK-EU divorce without a deal.
Still in the UK politics, Boris Johnson keeps leading the run-up to succeed Theresa May at Number 10.
In the calendar earlier today, German final inflation figures for the month of May came in i line with preliminary prints: up 0.2% inter-month and 1.4% over the last twelve months.
What to look for around GBP
Heightened uncertainty around the Brexit negotiations and May’s successor keeps the pressure on the Sterling intact for the time being. In the UK economy, recent results from the labour market lent some oxygen to GBP, although the broader softness in fundamentals remain the name of the game. Additionally, the current steady stance from the Bank of England appears justified by below-target inflation figures, downbeat results from key economic fundamentals and somewhat slowing momentum in wage inflation pressures, all adding to speculations of a ‘no-hike’ this year despite some calls signalling a potential hike in November.
EUR/GBP key levels
The cross is gaining 0.14% at 0.8908 and a break above 0.8932 (monthly high Jun.11) would expose 0.9062 (low Jan.11) and finally 0.9092 (2019 high Jan.3). On the other hand, initial support lines up at 0.8826 (low Jun.5) seconded by 0.8779 (200-day SMA) and finally 0.8724 (low May 21).