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.
Taking 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
