EUR/GBP: range now extended higher where next, 0.9025?

Currently, EUR/GBP is trading at 0.8915, up 0.41% on the day, having posted a daily high at 0.8936 and low at 0.8875.

Having ended the NY session yesterday at 0.8875 within the day's range of 0.8851-0.8879, EUR/GBP ran through stops in the European rally from 0.8880 to a high of 0.8934 when sterling was dumped on speculation about UK PM May could be resigning. 

"May’s bid to reassert her dwindling authority was ruined on Wednesday when her keynote speech was interrupted by repeated coughing fits, a prankster, and even letters of her slogan falling off the set behind her," - Reuters.

BoE’s McCafferty: No need for QE reversal until bank rate has been increased "several times"

Meanwhile, BoE's Haldane leant some support to the bullish case for Sterling in a mildly hawkish speech and we now await BoE's McCafferty.

Rates wise, the market is still pricing in an 80% probability of a rate hike in November and the September CPI figures and labour market report are due on the 17th and 18th October as the next major data points for Sterling while the wide range has no extended from between 0.8750-0.8934 area near term. However, rising inflation, Brexit and the political uncertainty are all weighing on the pound.

Analysts comments:

Analysts at Brown Brothers Harriman explained that the move above GBP0.8880 today opens the door to GBP0.8960-GBP0.9025.  "We note that sterling's weakness continues in the face of little change in expectations for a BOE hike.  Some observers are suggesting that the rate hike that so many are convinced will take place will be simply taking back the post-referendum rate cut and not the start of even a mini-tightening cycle."

EUR/GBP levels

The next target is 0.8975, while a reversal below 0.8743, the 14th July low and the 200-day ma is at 0.8726 and could open up 0.8530, the 78.6% retracement of the move seen this year.