25July 2019, GKFX – EURGBP keeps losing momentum this week and is now threatening to test the key support at 0.8900 the figure.
EURGBP looks to ECB, BOJO
The relief rally in the British Pound brought in some selling pressure around the European cross, particularly after Boris Johnson was elected new UK PM yesterday.
One of the first moves by the former London mayor was to purge the cabinet and have it oriented towards a Brexit ‘no deal’ with the appointments of D. Raab, P.Patel, A.Leadsom, L.Truss, J.Rees-Mogg, and S.Javid.
However, the renewed upbeat sentiment around the Sterling could be short-lived and only a consequence of the already large short positions in GBP, as demonstrated by the persistent increase in speculative shorts in past weeks.
Anyway, on this side of the Channel, the main focus will be on the ECB event amidst rising bets of an announcement of looser monetary measures, which contemplate lower interest rates, further QE and the probable change of ‘forward guidance’.
Earlier in the day, poor IFO figures added to the recent disappointment from flash PMIs and forced EUR to recede further ground.
EURGBP technical analysis
The cross is retreating 0.11% at 0.8913 and a breach of 0.8905 (monthly low Jul.24) would open the door to 0.8890 (55-day SMA) and then 0.8872 (low Jun.20). On the upside, the next barrier aligns at 0.9005 (high Jul.23) seconded by 0.9051 (monthly high Jul.17) and finally 0.9092 (2019 high Jan.3).
This article was provided by analysts at GKFX. The information provided herein is for general informational and educational purposes only. It is not intended and should not be construed to constitute advice.
If such information is acted upon by you, then this should be solely at your discretion, and GKFX will not be held accountable in any way.