23 Nov 2021
EUR/GBP picks up bids to refresh intraday high around 0.8400 amid the early European morning on Tuesday. In doing so, the cross-currency pair licks its wounds around the multi-day low as traders brace for the first estimations of November’s activity data from the Eurozone and the UK.
In addition to the cautious sentiment ahead of the key PMI data, Brexit woes also underpin the corrective pullback. UK’s Brexit Minister David Frost said on Monday, per Sky News, “We can't carry on as we were before." The diplomat adds, "If, after Brexit, all we do is import the European social model, we will not succeed.”
On the same line, the UK-French tussles over fishing rights also highlight the Brexit woes. “France has told the UK it is in its ‘best interest to settle’ the post-Brexit fishing dispute, saying if the two countries are to work together the UK must remain “true” to their word,” said Independent.
Elsewhere, fears of the coronavirus-led lockdowns escalated in the Eurozone after Austria, unfortunately, lead Western Europe to reimpose the local lockdowns. Considering this, the outgoing German Chancellor Angela Merkel said, per Reuters, “We are in a highly dramatic situation. What is in place now is not sufficient.”
Amid these plays, US Treasury yields remain lackluster but stock futures in the UK and the bloc print mild losses by the press time.
Given the likely easy PMI figures from Germany and the Eurozone, coupled with the comparatively less bullish bias of the ECB policymakers than their BOE counterparts, EUR/GBP bears are likely to keep the controls should the scheduled data matches forecasts.
Although a descending trend line from early August restricts immediate downside around 0.8380, a daily closing beyond 0.8420-25 area, comprising multiple lows marked in August, becomes necessary for the corrective pullback to last longer.
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