EURGBP Steadies After Breakout with No-Deal Brexit Risk
The EURGBP pair spiked higher last week after the threat of a No-Deal Brexit came back to the fore. Prime Minster Boris Johnson warned the European Union that the U.K. would walk away from talks if there was no agreement by the October deadline.
Johnson was looking to override the withdrawal agreement with an Internal Market Bill, which addresses the Northern Ireland border issues. The bill seeks to give more power to UK ministers so they can modify rules on the movement of goods. The Prime Minister is now facing tension within his own party, as well as with Brussels.
Today sees the release on industrial production figures with analysts expecting a print of -8.2% after July’s -12.3%. The next key releases for the pair will be on Thursday with the Bank of England rate decision and the EU consumer price index. The latter could be market-moving after last month’s negative inflation from the EU.
A report from Bloomberg said that Hedge Funds had increased their bets on the British Pound just before the latest talks broke down. After the risk of No-Deal came back then these traders would have bailed out of those pound longs and this would have added fuel to the latest Euro rally.
EURGBP Technical Outlook
EURGBP completed a strong move from resistance and powered through the resistance I noted at 0.9150, which now becomes the support for a consolidation move. The next targets are 0.9300 and 0.9500. The Investing Cube team are available for Trading Coaching. More details can be found here.