- EUR/GBP hits ten-day high at 0.8918 on the back of broad based GBP selling. Pound offered across the board on rising political uncertainty.
- Reports showed as many as 40 Conservative lawmakers have signed a letter, saying they have no confidence in May's leadership.
- Focus now on ECB’s Central Bank Communications Conference on Tuesday where major central bank leaders will speak as part of a policy panel organized by the ECB.
- Much depends on the tone of comments at the ECB's Communications Conference on Tuesday.
- Barclays expects a hawkish stance from BoE Governor Gamey to prompt a re-pricing of BoE Bank Rate expectations and support GBP.
- Contrasting views are expected from ECB President Draghi who is likely to strike a more cautious tone.
- Technically, we see slight bullish bias in the pair. Price action has broken 20 and 50-DMA. Daily cloud caps upside, break above could see further upside.
- Stochs and RSI are biased higher and we see +ve DMI rising.
Support levels - 0.8872 (20-DMA), 0.88 (50% Fib retrace of 0.8297 to 0.9306 rally), 0.8768 (200-DMA)
Resistance levels - 0.8920 (38.2% Fib), 0.8945 (100-DMA), 0.8995 (July 21 high)
Recommendation: Good to go long above 0.8920, SL: 0.8845, TP: 0.8945/ 0.8995/ 0.9068.
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