- EUR/GBP extends weekly decline to 0.8540.
- The intense sale of euros weighs on the cross in the middle of the week.
- UK Prime Minister B. Johnson could face another no-confidence motion.
Greater weakness of the European currency drags the EUR/GBP to fresh 3-week lows in the 0.8540 area on Wednesday.
EUR/GBP is pending UK policy and euro selling
EUR/GBP lost ground for the third consecutive mid-week session, heavily influenced by the single currency’s sharp decline in response to recession fears in Euroland as a whole combined with notable ECB inaction.
On the other hand, the pound sterling is expected to remain under scrutiny in a context of growing political ferment, especially exacerbated in response to several resignations of government ministers in recent hours and a more than likely no-confidence vote against Boris Johnson as soon as tonight.
Technical levels
The cross is down 0.43% at 0.8547 and a break of 0.8511 (16 Jun low) would expose 0.8485 (9 Jun low) and finally 0.8441 (200-Day SMA). On the other hand, the next upside barrier comes in at 0.8678 (Monthly High Jul 1), followed by 0.8721 (High Jun 15, 2022) and then 0.9085 (High Jan 6, 2021).
Source: Fx Street
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