- 21st May 2019
- Posted by: Hakeem
- Categories: FOREX LATEST NEWS DAILY, FOREX MARKET ANALYSIS, FUNDAMENTAL ANALYSIS, TECHNICAL ANALYSIS, TRADE
• EUR/GBP pushes higher and approaches the key 0.8800 milestone.
• Speculations escalate on another potential vote on May’s deal.
• Pressures on the rise over PM May to announce her exit from Number 10.
The sell off i the British Pound is lending extra wings to EUR/GBP to the boundaries of the key barrier at 0.800 the figure.
EUR/GBP probes the 200-day SMA
The European cross is extending its march north on Tuesday, advancing uninterruptedly since monthly lows in the 0.8490, already gaining around 3.6% and always tracking the increasing and unabated selling pressure in the Sterling.
Rising Brexit jitters coupled with uncertainty in the UK government and the likeliness that PM Theresa May could step down in the not-too-distant future has been removing shine from the British Pound and fuelling the deep leg lower.
Back to Brexit, several key MPs like A.Leadsom and J.Rees-Mogg have already anticipated they will not back PM May’s Brexit plan at the eventual vote at the House of Commons early in June.
What to look for around GBP
Following the cross-party fiasco, investors are now looking to another potential vote of PM May’s Brexit plan early next month, despite not few MPs have been already campaigning against it. In addition, bets on the probable successor of Theresa May at Downing St. remain on the rise and also collaborates with the rising volatility in GBP. On another direction and centred on the UK economy, recent publications from the industrial sector somewhat confirmed the rebound seen in the previous months, although the bounce in activity was exclusively driven by companies stockpiling in case of a ‘hard Brexit’ scenario rather than in response to a more ‘genuine’ recovery in the sector. Further out, the current steady stance from the Bank of England appears justified by below-target inflation figures, mixed 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 0.09% at 0.8783 and a break above 0.8790 (200-day SMA) would expose 0.8821 (high Feb.5) and finally 0.8840 (monthly high Feb.14). On the downside, initial contention aligns at 0.8722 (high Mar.2) seconded by 0.8684 (100-day SMA) and then 0.8611 (55-day SMA).