- EUR/GBP pushes higher to new multi-week highs near 0.90.
- GBP-weakness sustains the up move in the cross.
- EU-UK will resume talks later today in Brussels.
The increasing selling pressure around the Sterling is now lifting EUR/GBP to fresh monthly tops in levels just shy of the key barrier at 0.90 the figure.
EUR/GBP higher as ‘no deal’ picks up pace
The upside momentum in the European cross has gathered extra pace on Tuesday after the likeliness of a ‘no deal’ Brexit appears to have gained momentum following the telephone call between PM B.Johnson and Chancellor A.Merkel.
In fact, Number 10 deemed a Brexit agreement as ‘essentially impossible’ following the Merkel-Johnson call earlier in the day. However, both UK and EU officials are expected to resume talks later today in Brussels.
In the meantime, volatility around the British Pound is expected to increase in the next days ahead of the Queen’s Speech on October 14th and the key EU Summit on October 17th-18th, while speculations over a potential extension of Article 50 to January 31st and the call for early elections in the UK remain on the rise.
In the docket, the German Industrial Production expanded at a monthly 0.3% during August, not only surprising everybody in the markets but also reversing the previous month’s contraction.
EUR/GBP key levels
The cross is gaining 0.76% at 0.8991 and faces the initial hurdle at 0.9004 (38.2% Fibo of the May-August rally) seconded by 0.9019 (55-day SMA) and finally 0.9127 (23.6% Fibo of the May-August rally). On the flip side, a drop below 0.8880 (21-day SMA) would expose 0.8829 (200-day SMA) and then 0.8785 (monthly low Sep.20).