- EUR/GBP bounces off intraday low, challenges pullback from 10-week top.
- UK raises virus alert levels after a jump in covid variant cases, PM Johnson pushes for booster shots to above 30.
- EU-UK talks over medicine supplies dwindle, fishing raw continues and UK PM Johnson keeps ECJ in role to trigger NI protocol.
- ECB, BOE will be the key, UK Retail Sales, Brexit and virus updates are important too.
EUR/GBP picks up bids to pare Asian session losses as European traders await Monday’s bell. The cross-currency pair seems to react to the latest Brexit and virus updates concerning the UK to portray a rebound from the intraday low.
Among them, the UK’s escalation of the virus-linked activity restrictions from level 3 to level 4 gains major attention. As per the latest official details, 1,239 fresh omicron cases took the national tally to 3,137, marking the biggest daily jump in the virus variant cases since its detection in Britain. Even so, UK Prime Minister (PM) Boris Johnson sounds hopeful to overcome the crisis and pushes citizens above 30 years to take booster doses of the coronavirus vaccine.
On a different page, UK PM Johnson seems to step back from removing the European Court of Justice (ECJ) from its role in enforcing the Northern Ireland protocol. Though, the lack of progress in the latest talks over medicine supplies and the British-Fresh tussles over fishing licenses keeps Brexit fears on the top.
It’s worth observing that the Bank of England (BOE) policymakers are earlier conveyed concerns over the virus spread and are likely not to play any major games during this week’s monetary policy meeting. Alternatively, the European Central Bank (ECB) may surprise markets with a change in bond purchase methods amid mixed views of the Monetary Policy Committee (MPC) members.
Additionally, the US dollar’s pullback following the US inflation data offers counter-strength to the Euro and hence favors the EUR/GBP buyers of late.
Amid these plays, US Treasury yields struggle to pick up whereas the stock futures print mild gains at the latest.
Looking forward, a light calendar at home will restrict EUR/GBP pair’s intraday moves but risk catalysts are the key to follow.
Technical analysis
Sustained trading below the 13-day-old previous support, around 0.8535, becomes necessary for the EUR/GBP bears to keep reins.