- EUR/GBP approaches the psychological 0.9000 handle.
- Upbeat mood around the single currency props up the move.
- UK politics keep weighing on GBP sentiment.
The now softer tone around the British Pound is helping EUR/GBP to print fresh multi-month tops closer to the psychological 0.9000 mark.
EUR/GBP boosted by EMU data, looks to G-20
The rally in European cross remains everything but abated so far on Friday, advancing for the seventh session in a row and gaining nearly 6% since May lows in sub-0.8500 region.
Uncertainty around the UK political scenario stays on the rise while candidates Boris Johnson and Jeremy Hunt continue their run for Number 10 with the centre of the debate around the ‘no deal’ scenario.
Earlier in the day and in the UK docket, GDP figures showed the economy expanded 0.5% inter-quarter during the January-March period and 1.8% on an annualized basis, both prints matching consensus. Additional data, Business Investment expanded 0.4% QoQ during the same period.
In the euro bloc, flash inflation figures for the month of June surprised to the upside. In fact, headline consumer prices are seen advancing 1.2% from a year earlier while Core prices are expected to rise 1.2% YoY.
What to look for around GBP
Rising uncertainty in the UK political scenario is expected to keep the cautious stance intact around the British Pound, while bouts of USD-selling remains the sole driver behind sporadic bullish attempts in Cable. In the UK economy, mixed-to-poor results from fundamentals continue to add to the sour prospects for the economy in the months to come. On another direction, the overall tone from the BoE appears to have shifted towards a more neutral (dovish?) gear, while uncertainty around Brexit is seen as the main obstacle in determining the next move on rates.
EUR/GBP key levels
The cross is gaining 0.08% at 0.8978 and a break above 0.8992 (monthly high Jun.17) would expose 0.9062 (low Jan.11) and finally 0.9092 (2019 high Jan.3). On the other hand, the next down barrier aligns at 0.8872 (low Jun.20) followed by 0.8826 (low Jun.5) and then 0.8780 (200-day SMA).