EUR/GBP remains sidelined above 0.8600, looks to UK politics
- EUR/GBP moves within a narrow range above 0.8600.
- The HoC voted in favour of elections on December 12.
- The House of Lords will vote on the bill later today.
The recovery in both the shared currency and the British Pound is prompting EUR/GBP to extend the sideline theme above the 0.8600 mark so far this week.
EUR/GBP now focused on UK politics, data
The European cross is flirting with the 10-day SMA in the 0.8620 region, all amidst the broader consolidative theme in the low-0.8600s since mid-October.
In the meantime, the House of Commons approved on Tuesday the bill allowing the government to call for general elections on December 12, and today the bill will be debated in the House of Lords, although it is expected to face no opposition.
Data wise today, the German labour market report came in on the soft side ahead of the more relevant preliminary inflation figures expected later in the European afternoon. In addition, EMU’s Consumer Confidence dropped further to -7.6 for the current month and Spanish flash CPI results showed an utter lack of upside traction in consumer prices for he month of October.
On the other side of the Channel, the UK’s manufacturing PMI will be the next release of note on Friday.
What to look for around GBP
Following Tuesday’s vote in the House of Commons, the UK is heading towards December elections for the first time in nearly a century. Therefore, the quid is expected to face increasing volatility in response to results from poll estimates and headlines in either direction prior to the elections’ day. On the BoE’s side, there are no fresh updates since the latest ones, which reiterated the probability that the next move on rates could be a cut.
EUR/GBP key levels
The cross is losing 0.12% at 0.8622 and a drop below 0.8574 (monthly low Oct.17) would expose 0.8488 (monthly low May 6) and then 0.8474 (2019 low Mar.12). On the other hand, the next up barrier emerges at 0.8676 (high Oct.24) followed by 0.8811 (200-day SMA) and finally 0.8906 (50% Fibo of the May-August rally).