European indices as well as EURUSD are in the center of the attention today. Gazprom announced on Friday that it will halt gas supplies to Europe via Nord Stream pipeline indefinitely, triggering massive drops on the European stock exchanges. As the announcement came after close of European cash markets, pain in the cash markets can be seen in today's quotes. EURUSD dropped below 0.99 for the first time in 2 decades but has managed to climb back above this hurdle later on.
However, traders should also keep track of EURGBP currency pairs today as the name of new UK Prime Minister is expected to be unveiled shortly after noon. Announcements on results of UK Conservative Party leadership vote are expected at 12:30 pm BST, and the new Conservative leader will also become the new UK prime minister. The two contenders are Rishi Sunak, Chancellor of Exchequer in Boris Johnson's cabinet, and Liz Truss, foreign affairs minister in Johnson's cabinet. Truss is seen as a favorite to become the new PM. As she is seen as a more hawkish candidate than Sunak and advocates for tighter monetary policy, her victory could be GBP-positive. However, as she is a favorite, her victory can be to some extent priced-in already.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appTaking a look at EURGBP chart at D1 interval, we can see that the pair is struggling to make a break above the the 0.8650 resistance area, that has halted upward moves a few times over the past dozen or so months. A break above would pave the way for a test of the 0.8720 resistance. However, if Conservative leadership vote results turn out to be GBP-positive, another pullback from the 0.8650 area might occur. In such a scenario, 0.8575 area is the near-term support to watch.
Source: xStation5
The content of this report has been created by XTB S.A., with its registered office in Warsaw, at Prosta 67, 00-838 Warsaw, Poland, (KRS number 0000217580) and supervised by Polish Supervision Authority ( No. DDM-M-4021-57-1/2005). This material is a marketing communication within the meaning of Art. 24 (3) of Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (MiFID II). Marketing communication is not an investment recommendation or information recommending or suggesting an investment strategy within the meaning of Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse (market abuse regulation) and repealing Directive 2003/6/EC of the European Parliament and of the Council and Commission Directives 2003/124/EC, 2003/125/EC and 2004/72/EC and Commission Delegated Regulation (EU) 2016/958 of 9 March 2016 supplementing Regulation (EU) No 596/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the technical arrangements for objective presentation of investment recommendations or other information recommending or suggesting an investment strategy and for disclosure of particular interests or indications of conflicts of interest or any other advice, including in the area of investment advisory, within the meaning of the Trading in Financial Instruments Act of 29 July 2005 (i.e. Journal of Laws 2019, item 875, as amended). The marketing communication is prepared with the highest diligence, objectivity, presents the facts known to the author on the date of preparation and is devoid of any evaluation elements. The marketing communication is prepared without considering the client’s needs, his individual financial situation and does not present any investment strategy in any way. The marketing communication does not constitute an offer of sale, offering, subscription, invitation to purchase, advertisement or promotion of any financial instruments. XTB S.A. is not liable for any client’s actions or omissions, in particular for the acquisition or disposal of financial instruments, undertaken on the basis of the information contained in this marketing communication. In the event that the marketing communication contains any information about any results regarding the financial instruments indicated therein, these do not constitute any guarantee or forecast regarding the future results.